All eyes and ears are still on Brexit, with sterling getting new hope from more signs of a potential delay. Can it keep up its winning streak?
BOE Governor Carney speech (Mar. 5, 3:35 pm GMT)
Guv’nah Carney has another speech coming up early this week during which he will be testifying in front of the House of Lords. There haven’t been much changes on the monetary policy front these days, so it’s likely his remarks and the discussions would center on Brexit.
In last week’s testimony, Carney mentioned that the central bank is open to providing more support for the U.K. economy in the event that their worst fears (a.k.a. “no deal” situation) are realized. However, he did admit that their options are limited.
Although PM May seems to be doing everything in her power to rule out a messy breakup, Carney shared that they would be increasing the frequency of its liquidity operations to weekly from monthly in the weeks leading up to March 29 as precaution.
The BOE head honcho might give more deets on the central bank’s contingency plans, likely taking into account the recent developments such as the potential for another referendum.
Brexit, Brexit, Brexit
Time check? 25 days to go ’til Brexit!
Or will it happen at all?
With just four trading weeks left until the March 29 Brexit date, it’s no surprise that market watchers are keeping extra close tabs on the latest developments.
Last week’s updates fueled wishful thinking that the breakup could be delayed or even avoided completely. Parliament is due for another vote on the transition deal by March 12, but PM May has offered MPs two votes on March 13 and 14 if the deal is rejected again.
The first poll on March 13 asks if MPs are good with a “no deal” Brexit while the second one on March 14 offers the choice for a “short, limited extension” delay until the end of June.
Based on how things have been unfolding over the past months, it appears that postponing Brexit is the most likely outcome. EU officials have also signaled willingness to approve this delay as this could give the U.K. government more time to hammer out an agreeable deal.
With that, more indications that a Brexit delay is likely in the bag could keep pound bulls’ hopes up that a chaotic breakup could be avoided even as MPs don’t seem willing to support the transition deal in its current version. Still, be on the lookout for any plot twists as usual!
Missed last week’s price action? Read the GBP price review for February 25 – March 1.