Just when you thought Brexit could not get any crazier….

March 28, 2019

Theresa May has raised the stakes in order to get her Brexit deal across the line. But will it be enough?

The EURUSD weakened overnight due to a strengthening USD. The pair opened at $1.12646 and declined slightly in early trading before kicking up to a high of $1.12849 mid-session. Things went south for the euro from that point, where it hit lows of $1.12408 a few hours later. It has come off those lows slightly and is currently trading at $1.12500. The GBPUSD looked set for some huge gains until the latest Brexit twist came to light. The pair opened at $1.31996 and fell to lows of $1.31653 in early trading before a sustained rally saw it peak at $1.32686 late in the day. News then broke regarding Theresa May’s leadership, which saw the pound sink into the close, before closing at $1.31848. It has opened lower this morning and is currently trading at $1.31683.

The Dow opened and closed rather flat but there were some fluctuations in between. The index opened at 25,634.93 and climbed steadily in early trading. A small drop dotted those gains as it hit highs of 25,758.76 heading into late trading. The Dow then suffered a sharp fall, hitting lows of 25,417.85 a couple of hours later. The Dow was able to pare back most of those losses as it closed at 25,597.50. The Dax mimicked the Dow in that it opened and closed reasonably flat. The German index opened at 11,462.83 and fell to lows of 11637.78 early in the day. The Dax bounced off those lows to rally to a high of 11,507.35. It then temporarily gave up most of those gains before rebounding again, eventually closing at 11,447.94.

Well, Brexit certainly is in a calamitous state and will only get worse before it gets better. Just a day or two after the UK parliament voted in favour of taking control of the parliamentary agenda away from the May government, MPs put up eight different Brexit proposals to be considered and voted upon. All eight were defeated. News then broke that Theresa May said she would step down as Prime Minister if the parliament passed her twice-defeated Brexit plan. This has certainly elevated the stakes in the Brexit process. Whether it will be enough to persuade enough MPs to change their vote remain to be seen.

Data released today includes:

NZ- ANZ Business Confidence, RBNZ Governor Adrian Orr speaks

Europe – German Prelim CPI, Spanish Flash CPI, M3 Money Supply, European Private Loans, SNB Governing Board Member Andrea Maechler speaks

US – Final GDP, Final GDP Price Index, Unemployment Claims, Pending Home Sales, Natural Gas Storage, FOMC Members Randal Quarles, Richard Clarida, Michelle Bowman and James Bullard speak


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