- Positive Brexit transition news lifts the Pound
- US data the driving force for markets today
By Zafer Deniz
Positive Brexit transition news lifts the Pound
There was little economic data released yesterday, however, Sterling got a bit of a boost, as there was some positive news on a potential Brexit transition deal. Businesses may finally be about to get the Brexit transition deal they’ve been longing for. The UK’s secretary for Brexit, David Davis, is off to Brussels this Sunday, 18th
March, which is a sign that a deal is not far away. Davis meets the EU’s chief negotiator, Michel Barnier, on Monday 19th
March, after negotiations being conducted throughout this weekend.
A grace period of two years would help in the gap between the UK leaving the EU and figuring out the new required regime of regulation and trading rules. But there will, of course, be caveats. Any deal decided at this stage will be a commitment from both parties for a transitional period, but it will not be made into law until the final Brexit agreement is signed, so this would likely be right before the official Brexit day this time next year. Additionally, it has been reported this morning that the EU has accepted the UK’s demands to be able to pursue independent trade deals while still in the transition period. This is a major concession if true and could see the Pound test the 1.40 level once more.
US data the driving force for markets today
Moving on to the US, JP Morgan has lowered the US Gross Domestic Product (GDP) estimate to 2.0% from 2.5% after retail sales continue to slide. The number isn’t as critical as the direction of revisions, which has been steadily lower since the start of the quarter… Also, President Trump is widely expected to confirm Larry Kudlow as Gary Cohn's replacement. Kudlow is a well-known financial media personality and his appointment would likely reassure the markets.
In terms of data today, it’s very much US heavy, with US Jobless Claims and the Philadelphia Federal Business Outlook released at 12:30; and the US Housing Index out at 2:00pm.