Brexit deadlock remains despite May’s victory
|Theresa May’s victory has helped ease fears of a disorderly Brexit, with the PM heading out to continue her European tour. However, with her bill remaining deeply unpopular, something has to shift in order to break the deadlock.
-
US-China influence fades as European stocks drift lower
-
Theresa May survives, yet her Brexit plan remains unpopular
-
Will the ECB end QE despite economic and political upheaval?
European markets are failing to maintain the recent US-China centred gains, with Asian upside overnight failing to carry through into this morning’s session. A resurgent pound is doing little to help the FTSE 100, with optimism of a more stable Brexit outlook being reflected in sterling strength. Despite the US-China story failing to continue driving the entire market higher, many of the top FTSE gainers still reflect the focus on a possible rebound for commodity prices and demand, with Antofagasta and Anglo American both rising sharply.
The pound has managed to regain ground overnight, with Theresa May’s victory in yesterday’s vote helping raise hopes of a more stable political landscape. Despite some focusing on the fact that May had 117 members of her own party vote against her, the measure of victory was relatively wide and this is going to embolden her as she heads out to gain further concessions from the EU. However, while Theresa May is secure in her job for now, the hurdles that led to the vote in the first place remain, with few options in the event that she fails to get her Brexit bill to pass. There is no doubt that European nations will want the current proposal to succeed, yet the fact is that without any significant concessions, the UK is heading for the exit door with little in place.
Today sees markets turn to the ECB for directional guidance, with Mario Draghi expected to announce the end of asset purchases. While the end of QE is widely expected, there is always a slight inkling that Draghi could throw a curveball and decide to hold off given the current political and economic instability throughout Europe. With growth and inflation widely expected to be revised down, the bullish outlook is likely to be tempered somewhat, yet whether this will be enough to change the current course is another matter.
Ahead of the open we expect the Dow Jones to open 41 points higher, at 24,568.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.