Weekly Digest - INVESTEC
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Once again, we find ourselves at the beginning of what could be (though probably won’t be) the final week of the Brexit saga. Beyond the ongoing conversation between Theresa May and Jeremy Corbyn, the Lords today could back the Cooper-Letwin bill to avert a no-deal outcome. If the bill is passed, PM May would be required to bring a motion to the commons seeking MPs’ approval to extend the Brexit date. She would then go to Brussels on Wednesday to seek an extension. Should the EU refuse, then the UK must either revoke Article 50 or leave the EU without a deal at 11pm on Friday.
Away from Brexit, the world is feeling rather more upbeat at the moment. In the US, last Friday’s strong non-farm payroll data (196,000 new jobs created and unemployment at 3.8%) offered some reassurance that February’s abysmal reading was an anomaly. The trade talks between the US and China continue on a positive note, with Larry Kudlow upbeat on their progress, though both sides concede that there is still work to be done. This week will also see the start of an EU-China trade summit.
Wednesday sees the release of the minutes from the Federal Reserve’s latest policy meeting, which will no doubt be scrutinised for the catalysts behind the central bank’s U-turn on interest rate policy, with the market now discounting a c.60% chance of an interest rate cut in 2019. Adding to the Wednesday agenda, we also have a European Central Bank meeting and US inflation data.
The oil price is notably higher today, with the market eyeing the Libyan situation and the potential threat to supplies from one of the world’s top 20 oil-producing nations.
Finally, the US earnings season kicks off again this week with JP Morgan and Wells Fargo updating on Friday.