UK: Theresa May under pressure? – Nordea Markets

Sandeep Kanihama FXStreet Contributor

According to Andreas Steno Larsen, Research Analyst at Nordea Markets, a tough week for Theresa May is coming, as she will have to prepare for the extraordinary Brexit summit on Sunday 25 November without a designated Brexit minister, navigating substantial domestic obstacles in the meanwhile.

Key Quotes

“Should Theresa May ultimately decide to present the draft deal for the House of Commons, she will face an uphill battle gaining a majority.”

“The House of Commons consists of 650 MPs. Of these, the Speaker and his three deputies don’t vote. The Party Sinn Fein don’t vote either (7 seats). That leaves 639 MPs, so if everyone votes, 320 is the benchmark needed for Theresa May. On our guestimate, Theresa May can safely count on 250-270 votes, 91 votes are highly doubtful and leaning against on average, while at least 278 members will surely vote against.”

“In other words there is a very high risk that the deal will not pass parliament, should it be presented. Could the lack of belief in May’s Brexit deal be enough for a majority of the Conservative MPs to vote against Theresa May in the vote of confidence called by the leader of the hardliner European Research Group, Jacob Rees Mogg?”

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.

GBP/USD flirts with tops near 1.3470

GBP/USD manages to regain composure and challenge the area of daily highs around 1.3470 on Friday. Cable picks up pace despite marginal gains in the Greenback in a context of swelling geopolitical tensions and rising global oil prices.

Gold remains below $4,100 despite receding Fed hike bets, weak USD

Gold opens with a bullish gap at the start of a new week amid receding Fed rate-hike expectations and a bearish US Dollar. Oil prices tumbled after Trump canceled an attack on Iran and said that a deal is near, easing inflation fears. This forces traders to dial back bets on extreme Fed tightening and drags the USD to a fresh low since June 17, which, in turn, is supporting the non-yielding bullion. However, the recent repeated failures to find acceptance above $4,100 warrant caution for XAU/USD bulls.

Gold: The $4,000 mark holds the downside for now

Gold faces renewed selling pressure, falling sharply toweard the $4,000 mark per troy ounce as the US Dollar regains momentum. Escalating US-Iran tensions are keeping inflation concerns and expectations of further Fed rate hikes alive, weighing further on the yellow metal.

Week ahead: US payrolls report and AI earnings to keep investors on edge

After the Fed decision, NFP report awaited for more rate hike clues. Employment also on the agenda in Canada and New Zealand. Chinese trade and Japanese wage data to be watched too. But Iran and AI headlines to remain in driver’s seat for risk sentiment.

Middle East War updates: Trump holds off Iran strikes on pledge Hormuz deal is close

Here’s a brief recap of the key developments in the Middle East war that occurred over the weekend, which are expected to have a significant impact on markets in the upcoming week. Risk sentiment improves on Monday, undermining demand for the US Dollar Index and drag crude oil prices lower.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.