Boris pushes General Election to resolve Brexit

28 October, 2019

Tom Arnold

Last week was a very important one in the ongoing Brexit drama, with Boris finally getting his chance to bring his Brexit Deal to the UK parliament for approval. And he got it! Sort of, but not quite. His deal was approved, but his desire to push it through quickly to try and meet the October 31st deadline was scuppered, when the proposed timeline failed to get approval from the House of Commons. In essence parliament were prepared to vote his deal through, but only if they were given longer to scrutinise the exact details, to make sure they were 100% happy with it, before it went through to its second reading. What this means is that the original vote approving the deal was pretty much voided, as the bill cannot proceed without an approved timeline, leading the Speaker of the House; John Bercow, to describe the situation as “Brexit Limbo”.

As a result, the government has gone into overdrive pushing for a general election to sort out the mess. However, this poses its own problems because the opposition parties will only grant the government an election when they feel that a couple of things are taken off the table. Labour wants to ensure No Deal cannot happen, by default, when for example parliament is dissolved for election campaigning. Whereas the anti-Brexit Liberal Democrats and SNP, want to go as far as to ensure the government cannot use a similar period to shoehorn through the Brexit Deal.

The result is indeed complete limbo. The government will today almost certainly bring a motion to dissolve parliament and head for a 12th of December general election, but as things stand it seems incredibly unlikely they will get it and as such we are left waiting on new developments, and of course a decision from the EU on extending the Thursday deadline.

The week ahead is a very busy one on the currency markets, with plenty of economic data due, but it remains to be seen whether anything will be able to grab the headlines from the ongoing Brexit news updates. The two pieces of data with the biggest chance are probably the US Federal Reserve interest rate decision and the US Non-Farms Payroll number. The expectation is that the FED is going cut interest rates, sooner than expected, and that Non-Farm Payrolls might flop, so if you have Dollars to buy or sell it is critical to make sure you have your eye on these releases.

ECB President Draghi Speech
US Goods Trade Balance

UK Consumer Credit
UK Mortgage Approvals
US Consumer Confidence

Australian CPI Inflation
UK Nationwide House Price Survey
European Consumer Confidence
German Unemployment Rate
German CPI Inflation
Canadian Interest Rate Decision + Monthly Policy Statement
US Interest Rate Decision + Monthly Policy Statement

European GDP
European CPI Inflation
European Unemployment Rate
US Jobless Claims

UK Manufacturing PMI
US Non-Farm Payrolls
US Average Hourly Earnings
US Manufacturing PMI

As ever, make sure to stay in close contact with your CI consultant to be kept informed of the developing Brexit news and any other important economic data, and what impact they are having on your upcoming currency requirements.