UK: Brexit proposals continues to weigh on government - Westpac
In the UK, inability to provide clarity on Brexit proposals continues to weigh on May’s vulnerable minority Govt, according to Tim Riddell, Research Analyst at Westpac.
Key Quotes
“This uncertainty could impact business intentions and might become apparent in BoE’s Agents’ Report and next week’s PMIs. Carney’s press conference on the Financial Stability Report highlighted the huge quantity of derivatives contracts that need to be amended as Brexit approaches. The financial sector may be strong enough to cope with a cliff-edge Brexit, but economic impacts (not specified), could be large enough to cause the bank to react. Carney cited the escalation of trade tensions as another factor to contain policy.”
“UK will release its post-Brexit white paper next week and will hold an internal summit to forge a united front on Brexit proposals. Despite longer term concerns, this may allow GBP some respite, along with consolidation in UK-US 2yr spreads. However, GBP/USD rebounds may struggle around 1.3500 as a possible 1.28-1.37 range develops.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
