Market movers today
Today is rather heavy for market moving events on data, Brexit and ECB speakers. On the data front, the Norwegian labour force survey and Swedish manufacturing confidence are released (page 2).
On the central bank front, several ECB officials are due to speak at the annual ECB watchers’ conference, which definitely has the potential to move markets. Programme can be seen here . Most prominently, Draghi will speak at 9:00 am and Praet at 9:45 am CET.
On the political front, we have yet another round of indicative votes today on Brexit in the UK (watch out for what they will vote on, especially the formulation on softer versions of Brexit, as it would be important for whether the House of Commons can support it or not). Remember, the indicative Brexit votes are not legally binding and we do not know how the EU will respond, although EU leaders will probably welcome a softer stance. This, however, will likely require a longer extension to negotiate. The main problem about Brexit is there is no majority for anything (except for a majority being against a no deal Brexit) and the House of Commons has voted most proposals down already in one way or another, so what has changed? Voting starts at 20.00 CET and results will likely be in 21:30-23:00 CET (for more details see The Guardian).
Selected market news
On Brexit, all eyes are on the indicative votes tonight and to what extent they will bring clarity on the way forward . Yesterday, more Brexiteers including now officially Jacob Rees-Mogg, one of the most prominent Brexiteers, are now suggesting they will, or are close to, support May’s deal, as they see the alternative is a softer, not a harder, Brexit. We have argued for a long time that this would probably happen eventually. The problem is that DUP does not seem near supporting May’s deal just yet and yesterday DUP’s Wilson said a long extension would be better than May’s deal. It would probably also help if PM Theresa May was willing to step down but she is unlikely to give in to this demand before she knows it is sufficient to get the deal over the finishing line. Even if DUP and most Conservatives support the deal, May will probably still need Labour votes, as both conservative die hard remainers and Brexiteers, although small in number, are voting against the deal no matter what.
In relation to the economic outlook for the Eurozone , it was interesting to see the bounce in the INSEE measure of French business confidence for the month of March. This was the third confidence measure over the past two days, after yesterday’s German IFO and Belgium business confidence measures, to suggest improvement in Europe in March rather than the significant decline implied by the manufacturing PMI data last week. While markets may place more weight on the PMI data, at least so far there is not sufficient evidence to suggest its decline has been universal across other survey-based measures.
