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Sterling unmoved by UK Prime Minister’s vote defeat

Published: Wednesday 09 January 2019

  • Sterling unmoved by UK Prime Minister’s vote defeat
  • Commodity rises strengthen AUD, NZD, CAD and others
  • No change expected from Bank of Canada
By David Johnson

The UK Prime Minister now knows with no doubt whatsoever that the majority of UK Members of Parliament don’t want a ‘no deal’ Brexit. What they do want is much more of a mystery, but one that should become more transparent over the next 10 days and the ‘meaningful’ vote will be followed by a meaningful discussion over how the rest of parliament plans to avoid their dreaded ‘no deal’ scenario. Some have tabled an amendment that would require Theresa May to return to the Commons within three days of a defeat on the ‘meaningful vote’ to deliver a Plan B. So a meaningful vote followed by a meaningless demand.
Brace yourselves for Bank of England blow
What effect has that had on the Pound? Almost none. It seems the markets already know what they want. Certainty of some description would do it. Then they could get back to spicing up the trading volume and the volatility that it delivers. Aside from the NIESR UK economic growth estimate, the only other meaningful UK news for today is a speech from the governor of the Bank of England. Mark Carney is infamously bad news for the value of the Pound when he speaks, so brace yourselves. 
US President antics don’t dip Dollar, but oil prices do
The US President told Americans that they need to tell the senators to approve the budget for his wall or he will continue to hold the workings of the government services hostage. Did it affect the US Dollar? Nope.
What did shift some elements of the foreign exchange market overnight was a small rise in oil prices and further rumours that America and China might reach some kind of trade agreement. That boosted commodities prices generally and therefore strengthened the currencies of the big producers. The Australian, Kiwi and Canadian Dollars sit in that group, along with the South African Rand and the currencies of many oil producers.
Little on offer for Euro today
Today’s data diary includes the Eurozone unemployment rate. That is likely to remain at 8.1%. We have already had a surprisingly positive German trade surplus but that is all the day offers for the Euro.
North American news focuses on interest rates
This afternoon brings an ‘on hold’ decision from the Bank of Canada. Anything else would be a significant upset and would cause volatility in the Canadian Dollar. We will also see the release of the minutes from the last US Federal Reserve meeting at which they hikes the base rate by 25 basis points to bring their variable rate up to 2.0% to 2.25%. There have been a lot of indications they will pause now, but the text of the meeting may offer a different perspective.
Make commuting great again
And CES, the immense technology show, has kicked off in Las Vegas and I have a couple of items on my shopping list. Bell, the helicopter people, are showcasing a car/drone/copter hybrid thing, which would make commuting fun again. This, plus the wand-like thing that Procter and Gamble are promoting. When swiped across the skin, it releases a serum that covers age spots and imperfections. So, you could arrive in style looking younger. Who wouldn’t want those as a package.

A few one-liners to start Wednesday
  • I gave Elsa a balloon, but she let it go.
  • If you don’t know what introspection is, you need to take a long, hard look at yourself.
  • I joined Snapchat. It wasn’t what I expected. No one ever mentioned card games.
  • The World Series must be fixed. It’s only ever US teams that get into the final.

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