A Week Is A Long Time

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As the adage goes, a week is a long time in politics. With events still highly fluid, there remains scope over the weekend for new Brexit developments to emerge. However, at the time of writing, little has been officially confirmed regarding next week’s statement and votes, or the timing of the second ‘meaningful vote’.

What is apparent is that, following her meetings with European Commission President Juncker and other EU leaders this week, the PM will likely attend the EU-Arab League summit meeting in Sharm el-Sheikh over the weekend, where it is likely that Brexit discussions will continue; though they will not be the main event. Current guidance suggests that following next Tuesday’s statement by the PM, there will be a debate and votes on a Brexit motion on Wednesday.

Reports suggest that the PM will try and reassure MPs that sufficient progress has been made to satisfy them. Clearly, the content of the statement, and the response of lawmakers to it, will determine the weight that the following day’s events hold; including whether there are significant amendments to the motion. Currently it appears that next week’s vote will not be the second ‘meaningful vote’.

Market pricing reflects a heightened expectation of near-term volatility, with GBP/USD and EUR/GBP 1 month volatility both rising over the course of the week. Also on the 27th, US President Trump is set to meet North Korean leader Kim at a Summit in Hanoi. Having stepped down the rhetoric around the 1st March deadline for tariffs against China, it has been suggested that his highly awaited meeting with Chinese leader Xi may come in the next few weeks. Meanwhile, the US appears to be playing down the absoluteness of the deadline, focusing instead on the establishment of six Memoranda of Understanding and a list of US exports of which China will increase its purchases.

Meanwhile, reports suggest that should the US President’s rhetoric on EU car manufacturers escalate further the bloc is ready to respond. Whether that is a threat or a promise, only time will tell!

See you next week.

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