Last night’s vote saw Commons vote 328 in favour of seizing control of the Parliamentary agenda, in order to block a No-Deal Brexit. On the same day, Boris Johnson decisively lost his majority in the House, and the pound and Remainers alike celebrated the outcome of last night’s proceedings. The pound led the the rebound today, followed by market indices such as the Dow Jones. Sterling’s boisterousness was perhaps premature, or will at least be short-lived, with Boris now calling for an election. Far from preventing a No-Deal Brexit, last night’s verdict likely pushed forward a snap election which has Boris winning a majority pinned as the most likely outcome. In short – and as stated by Tony Blair on Monday – the Labour-led Remain coalition will come to rue, not relish, an election.
Speaking on today’s movements, Spreadex Financial Analysts Connor Campbell said,
“In quite the reversal from Tuesday’s 34-year lows – and brushing off a poor services PMI – Parliament’s attempts to avert a no-deal Brexit have put a spring in the step of the pound.”
“Admittedly it couldn’t quite maintain its lunchtime giddiness, where it found itself trading above $1.22. However, it was still up 0.8% against the dollar, and 0.3% against the euro, its weaker performance against the latter due to a decent morning for Eurozone PMIs.”
“That this comes despite the still present threat of a general election shows just how desperate the currency is to avoid Britain crashing out of the EU without an agreement in place – some uncertainties, after all, are more palatable than others.”
“Though the FTSE remained in the green, it did eventually succumb somewhat to the strength of the pound. In other words, it clung onto a half a percent increase, but slipped from its 7330-crossing one-month highs.”
“Elsewhere the rest of the markets continued to ride high off a combination of a temporarily reassuring Chinese services PMI, and the calming of the political situation in Italy. The DAX and CAC rose 0.8% and 1.2% respectively to hit 12000 and 5520, while the Dow Jones climbed 175 as it eyed 26300.”
Other news and macro financial updates have come from; Parliament being prorogued, No-Deal Brexit preparations, UK GDP during the second quarter, the London Stock Exchange Group (LON: LSE), the US-China currency manipulation debacle, and analysts’ outlook for markets and currencies.