(20 MARCH 2019)DAILY MARKET BRIEF 2:Brexit Bedlam

(20 MARCH 2019)DAILY MARKET BRIEF 2:Brexit Bedlam

20 March 2019, 13:05
Jiming Huang

There is a high probability that Prime Minster May will pass out due to g-force in the British politics. The UK is hurling towards Brexit with no steering or brakes, so can someone call Denzel Washington, please (see classi film "Unstoppable")?

The most recent update is that May is looking for a short extension to the Brexit schedule. The EU has indicated that any extension would only be granted for a good reason: a deal on the table, elections, a new referendum etc. Sterling volatility has receded in recent day as markets now expect an extension and a deal as the most likely outcome. Currently, no meaningful vote is scheduled in the House of Commons, and we suspect there is also the silent hope that the longer the game is dragged on, the likelihood of Brexit decreases. However, this just feels like a guess with downside extreme. Elsewhere, UK inflation data shows headline CPI inflation steady at 1.8% and core at 1.9% — but data has become extremely irrelevant at this point.

By Peter Rosenstreich

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