Theresa May claims Brexit 95% done, doubts remain over leadership

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23 October 2018

Συντάχθηκε απο τον
thomasdodds

The Pound sank to its lowest level in almost three weeks against the US Dollar on Monday afternoon, dragged almost half a percent lower for the day amid ongoing concerns over Brexit.

N
ews that Prime Minister Theresa May could face a serious leadership challenge following the ongoing debacle surrounding the disagreement over the Irish border weighed heavily on Sterling yesterday. Reports over the weekend suggested that an unnamed lawmaker warned May to brace for a leadership challenge.

The Tory Party itself remains seemingly divided over the Irish border issue that many analysts believe could prove the ultimate downfall over Brexit talks. While we continue to believe that a deal over Brexit is much more likely than not before the end of the year, fresh calls for a leadership challenge makes the path to an agreement that bit more unclear.

Speaking at the House of Commons on Monday afternoon May stated, as was reported over the weekend, that 95% of a deal had been completed. An accord over the Irish border issue does, however, remain some way off, with progress appearing insufficient in order to warrant an emergency EU summit in November. We may now have to wait until the December EU summit for news of an agreement.

Euro slips after Moody’s Italy rating downgrade

Concerns over Brexit and Italian politics ensured that the Euro also remained firmly on the back foot on Monday.

The European Commission is widely expected to reject Italy’s budget deficit proposals today for fears that the relatively lofty target could enlarge the country’s already sky-high level of public debt. Friday evening’s slashing of Italy’s sovereign debt rating to one notch above junk from rating agency Moody’s has far from helped sentiment towards the common currency. Moody’s lowered the country’s rating to Baa3 from Baa2 amid concerns over budget plans, albeit held the outlook as ‘stable’. This would suggest that a further downgrade in the rating into ‘junk’ territory is unlikely any time soon.

With no major economic data releases today, attention will turn to Wednesday morning’s flash PMIs for October.

US Dollar index edges higher, third quarter GDP data eyed

Concerns over Italian politics helped lift the US Dollar index yesterday amid a relatively quiet day for domestic economic news across the pond. With news flow in the US fairly quiet today, investors will have one eye on Thursday’s durable goods orders data and Friday’s third quarter GDP numbers. Another solid growth reading of 3.3% annualised is eyed, which would confirm the US economy continues to grow at a pace far outstripping much of the developed world.

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