It’s back to regular Brexit programming for Prime Minister May as she was able to survive the leadership challenge on a 200-117 vote. Sterling was already edging higher ahead of the vote but quickly faded the initial spike when the results came out.
Wall Street was also in a positive mood as trade optimism returned when China made good on its promise to increase spending on U.S. agricultural products.
- PM May survives Conservative leadership challenge 200-117
- May says she will not lead the party in the next general election
- May to head to Brussels to seek Brexit deal clarification from EU leaders
- U.S. headline CPI posted flat reading in November as expected
- U.S. core CPI up another 0.2% as expected
- Canadian capacity utilization rate down from 84.1% to 82.6%
- EIA crude oil stockpiles down 1.2M barrels vs. projected 3.0M decline
May survives leadership challenge
When you play the Game of Votes, you win or the U.K. plunges into deeper uncertainty. Fortunately for PM May, she was able to garner enough votes to stay in power and not have to deal with yet another leadership challenge for the next twelve months.
Sir Graham Brady announced:
“The result of the ballot held this evening is that the parliamentary party does have confidence in Theresa May.”
May was able to get 200 votes in favor of keeping her as PM, much higher than the needed 158 to scrape by. Still, the 117 votes against her leadership reflected enough opposition for her to declare that she won’t be leading the party in the next general election.
In a short speech after the vote, No. 10 said:
“This has been a long and challenging day. But, at the end of it, I’m pleased to have received the backing of my colleagues in tonight’s ballot. Whilst I’m grateful for that support, a significant number of colleagues did cast a vote against me and I have listened to what they said.”
The work doesn’t stop for PM May as she will be heading to Brussels next in order to seek legal and political assurances on the Irish border backstop from 27 EU leaders – all that before taking the deal back to parliament for approval while dealing with calls for her to resign as the clock winds down to the March 2019 Brexit date.
Risk appetite boosted by trade
Positive developments in U.S.-China trade relations kept risk-taking in play and lifted equities to close out with strong gains.
- Dow 30 index is up 157.03 points to 24,527.27 (+0.64%)
- Nasdaq is up 66.48 points to 7,098.31 (+0.95%)
- S&P 500 index is up 14.29 points to 2,651.07 (+0.54%)
Crude oil edged higher early in the session on export cuts from Libya but returned those gains when Iran’s Oil Minister Bijan Zanganeh told state television that the OPEC hasn’t exactly been accommodating.
Major Market Mover(s):
Sterling was on a steady climb during the leadership challenge to PM May as traders were pricing in odds that she would stay in power. The U.K. currency spiked higher when the results were announced, but profit-taking came just as swiftly.
GBP/USD started at 1.2545 then jumped to 1.2672 before slipping to 1.2593; GBP/JPY advanced from 142.26 to 143.45 then fell back to 142.58; EUR/GBP dipped to a low of .8973 then recovered to a high of .9025.
Watch Out For:
- 12:00 am GMT: Australia’s MI inflation expectations (3.6% previous)