- UBS Swiss consumption indicator: 1.50 vs. 1.44 previous
- French INSEE consumer confidence: steady at 100 as expected
- Credit Suisse economic expectations: 29.6 vs. 19.4 previous
- U.K. net lending to individuals: £4.9B as expected vs. £4.8B previous
- U.K. mortgage approvals: 68.3K vs. 69.1K expected, 69.1K previous
The promised day has finally arrived and Article 50 of the TEU was triggered. As a result the pound bounced higher while the euro and the Swissy got hammered.
Article 50 triggered – Earlier today, Theresa May sent this 6-page letter to European Council President Donald Tusk, who confirmed via Tweeter.
After nine months the UK has delivered. #Brexit
— Donald Tusk (@eucopresident) March 29, 2017
And in Theresa May’s speech before Parliament, she said that she wants a “new, special and deep partnership with the European Union.” May then promised that she will not “cherry pick” on the Brexit deal while warning that if the EU adopts a protectionist stance, then “Failing to stand up for European values would be a costly mistake.”
EU resolution leaked – The Guardian has somehow acquired a leaked European parliament resolution, which you can read here. And they were not as welcoming on first glance.
Some of the more important details include denying any special deal for the City of London “providing UK-based undertakings preferential access to the single market and, or the customs union” and denying the U.K. a trade deal if the U.K. tries to negotiate trade deals with other countries during the duration of the Brexit negotiations. Also, a future deal between the U.K. and the EU “can only be concluded once the United Kingdom has withdrawn from the EU.“
ECB rumors – According to unnamed sources being cited by Reuters, ECB officials “are wary of making any new change to their policy message in April after small tweaks this month upset investors and raised the specter of a surge in borrowing costs for the bloc’s indebted periphery.”
Moreover, these unnamed sources note that ECB officials “are keen to reassure investors that their easy-money policy is far from ending, suggesting reluctance change message before June.”
Major Market Mover(s):
GBP – The pound began rising before Article 50 was triggered. And when it was finally triggered, the pound rose some more, likely because of short-covering.
GBP/USD was up by 59 pips (+0.48%) to 1.2459, GBP/CHF was up by 103 pips (+0.84%) to 1.2422, GBP/JPY was up by 28 pips (+0.20%) to 138.13
EUR – The euro got hammered during the session, especially after the Brexit trigger. Some market analysts attributed this to technicals. Although it’s also possible that pound strength weighed down on EUR/GBP, pulling other euro pairs with it. Other market analysts, meanwhile, are pointing to the Reuters report about the ECB that I mentioned earlier, since that got released at around the same time as Brexit got triggered.
EUR/USD was down by 31 pips (-0.28%) to 1.0763, EUR/NZD was down by 85 pips (-0.55%) to 1.5326, EUR/GBP was down by 75 pips (-0.87%) to 0.8629
CHF – The Swissy was competing with the euro for the (dis)honor of being the weakest currency of the session. No clear reason why, since risk sentiment was mixed. Although it’s possible that the SNB was messing around again by weakening the Swissy in order to scare off safe-haven demand for the Swissy.
USD/CHF was up by 35 pips (+0.36%) to 0.9970, AUD/CHF was up by 24 pips (+0.32%) to 0.7617, NZD/CHF was up by 38 pips (+0.56%) to 9,6995
- 1:20 pm GMT: Chicago Fed President Charles Evans will speak
- 2:00 pm GMT: U.S. pending home sales (2.5% expected, -2.8% previous)
- 2:30 pm GMT: U.S. crude oil inventories (1.2M expected, 5.0M previous)
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
Head on to Big Pippin’s Daily Chart Art for some pip-locking technical weeks!