Market Overview
The uncertainty in UK politics surrounding Brexit is enormous. Often with events, uncertainty comes into a binary pattern of potential events. However, with Brexit, there is such an array of potential scenarios that could play out that it is almost impossible to predict. What happens in situations of such significant uncertainty? Sell now and figure it all out later. UK Gilt yields falling sharply are not helping the pound either. This seems to be the path for sterling right now. The end result determines the means, right? Well, in this instance, it may not be the case, as Theresa May has succumbed to domestic pressure surrounding the seemingly unacceptable elements of the Withdrawal Agreement deal with the EU-27 (i.e. she cannot be the deal voted through on the current numbers). So she will go back to the EU and try to extract more concessions from the EU. It would be quite something if this proves to be successful in any substantive way, but this is likely to be a futile attempt. Cue analogies of cans being kicked down the road. Whilst this happens, today’s “meaningful vote” has been postponed and the UK remains in limbo/purgatory over the true outcome on Brexit. The volatility on sterling shows no sign of letting up.
Read more: https://www.hantecfx.com/sterling-press ... -the-road/
