Could PM Theresa May be running the clock to trigger a Brexit delay? A looming bipartisan amendment from the Conservative Party’s Boles and Labour’s Cooper to aim at forcing to extend Article 50 in the event that no deal is reached by Feb 26th is likely to be approved. More delay would increase chances of Parliament to push for a 2nd referendum (GBP-positive). And with regards to the backstop (the main sticking point opposed by the DUP), the EU would have to offer May some concession on it (such as agreeing on some sort of finality or a clearer duration to keeping the UK in the Customs Union to facilitate Irelands’ border situation). If the EU and May agree on such a deal, both the DUP and the Eurosceptic ERG (European Research Group) will likely approve May’s deal–another solid positive for sterling. The Premium video highlighting last night’s trade is posted below. On Friday, the Long DOW Premium trade hit its final target of 24630 from the 24080 entry. No Index trades are currently open.
Stronger than expected UK earnings data (3.4% from 3.3% y/y) and a drop in Nov unemployment to 3.9% from 4.0% have also helped the pound. Germany’s ZEW current situation index dropped to 27.6 in January from 45.3. US new home sales are due at 10:00 Eastern (15:00 GMT/London). The ECB decision/press conference are due on Thursday.
