By George Hopkinson
The GBP rallied overnight and reversed yesterday’s losses after PM Theresa May’s second defeat, as Parliament voted against a no-deal Brexit this morning. Leaving the European Union without a deal was rejected by a narrow 312 to 308 votes. It should be noted that it is not a legally-binding decision and does not rule out the UK leaving the EU, however, will increase pressure on PM May to rule out a no-deal exit and MPs could get a vote on delaying Brexit from 29th March until 22 May 2019 so there can be a “managed no-deal” Brexit. This vote is now scheduled to take place tomorrow and the EU will still need to agree to an extension. The potential for more pound-positive outcomes, with either a soft Brexit or a second referendum.
AUD gains against the greenback have been tempered by weaker than expected consumer confidence data released yesterday morning; highlighting the knock-on effects from the housing price falls in recent months.
US durable goods orders surprised to the upside in January, with a 0.4% increase. Support for the USD however, was limited as producer prices barely rose in February leaving forecasts for weak first-quarter economic growth intact and supporting the Federal Reserve’s patient stance on raising interest rates.
Japan’s core machinery orders were down 5.4% for the month of January vs expectations of a 1.7% decrease. Orders from non-manufacturers slumped 8% in January from the previous month and the fastest decline in four months. The sharp fall in orders is largely due to businesses pulling back from investing amid growing uncertainty over the US-China trade war.
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