Market movers today
While today is quiet in terms of economic data releases, we have a very eventful week ahead of us!
As we expected, US President Donald Trump postponed the deadline for raising tariffs on Chinese imports.
Trump will meet with the North Korean leader Kim Jong-un this week.
PM Theresa May has said there will be no so-called ‘meaningful vote’ on a full Brexit deal, as she is still negotiating with the EU. Instead, there will be another indicative vote on Wednesday , where the MPs will again try to force May to ask for an extension to the deadline. The question is, however, for how long if that is the case.
Fed Chair Jerome Powell begins his two-day hearing in the US Congress tomorrow.
In terms of economic data releases, we have plenty of important US releases. Housing market data is due out tomorrow, the initial estimate for Q4 GDP growth on Thursday and ISM manufacturing index on Friday.
In the euro area, preliminary HICP inflation data is due out on Friday.
Selected market news
In the early session, equity markets in Asia advanced with US futures and the CNY climbed after US President Donald Trump postponed the date for hiking tariffs on China ‘s imports. However, the rise in US futures calmed after China’s state-run Xinhua news agency said that talks will be harder at the final stage.
Theresa May has postponed the next so-called meaningful vote, which should have taken place tomorrow, by another two weeks to 12 March, as she still does not have a new deal with the EU. We still have the indicative vote on Wednesday, where the most important thing is whether the House of Commons will force May to ask for an extension of Article 50 or not. As it is not the last chance for the MPs to do this, it will likely be a close call. The problem for Theresa May is that the EU has said it will not give any concessions before May shows a stable majority (see POLITICO). The Guardian indicated that the EU would prefer a long extension of Article 50. We have argued for some time this may be the best way forward without either side losing face, as more details on the future relationship would make the backstop redundant.
On Sunday 24 February, The Telegraph reported that Theresa May is considering a plan under which Brexit could be delayed for up to two months . The UK government has prepared a series of options, which were disseminated over the weekend, in order to avoid resignations by ministers determined to support a backbench bid to take a no-deal Brexit off the table. The options contain making a formal request to Brussels to delay Brexit if May cannot agree on a deal by 12 March. On the other hand, the EU is considering telling her that if she cannot get her Brexit deal through parliament and wants to delay the departure date, the country will have to stay in the bloc until 2021, Bloomberg reported.
