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Brexit and Trade talk disappoint

Published March 15, 2019

by Nicholas Cork

The world seems the same but different this morning as the two major issues affecting markets seemed to have been kicked down the road again and remain unresolved.  Trumps’ latest comments around the proposed meeting with Xi to mark their supposed trade progress rattled investors when he said: “I think things are going along very well – we’ll just see what the date is,”. The sentiment was further dampened after Trade Rep Lighthizer warned ‘major issues’ remained outstanding in talks.

So much for the firm 90-day deadline…  This managed to cap any recovery for the AUD at 71 cents. The AUD has slipped back into a 0.7040/0.7090 range for now. Further capping AUD upside was Chinese data release showing that Industrial Production had hit a 17 year low.

With the attempted Brexit, UK Lawmakers voted overwhelmingly to seek a delay to Britain’s exit from the European Union by 412-202 votes. The most telling assessment for me was from May’s spokesman saying they now have to confront the difficult position parliament has left us in.

May will now need to try again to get her twice-rejected divorce deal approved in parliament by next week and is pressuring rebel MPs to back her, threatening a longer delay if they reject her deal. The pound remains reasonably unaffected from the news as appears no large bets being placed at the moment and volatility has actually eased in the GBP.

Latest headlines now look like this 15-Mar-2019 08:38:23 AM – UK ATTORNEY GENERAL GEOFFREY COX ATTEMPTING TO WIN OVER EUROSCEPTIC TORY MPS AND THE DUP WITH NEW LEGAL ADVICE – THE TELEGRAPH 08:40:03 AM – UK AG COX’S NEW LEGAL ADVICE TO STATE THAT BRITAIN WILL BE ABLE TO BREAK OFF FROM IRISH BACKSTOP UNDER TERMS OF THE VIENNA CONVENTION – THE TELEGRAPH. Still, a reasonably long road ahead…

Have a nice weekend.

Chinese Industrial Production hits 17-year lows leaving a volatile history in its wake (Reuters)