It’s no surprise that sterling chalked up yet another losing week as Brexit developments have been a series of unfortunate events. Any chance things could get better this week?
Industry PMIs (starting Apr. 1, 8:30 am GMT)
If there’s something that the pound has got going for it, it’s U.K. economic data. The numbers have actually shown some strength, particularly on the jobs front, reflecting resilience among most sectors.
These upcoming industry PMI readings should signal whether or not businesses are starting to brace themselves for the worst as a disruptive or disorderly Brexit seems apparent.
Analysts predict that the manufacturing PMI could dip from 52.0 to 51.2 to indicate a slower pace of industry expansion in March. The services PMI is projected to fall from 51.3 to 51.0, also still reflecting growth but at a slower pace. Lastly, the construction PMI is slated to improve from 49.5 to 49.8 to show a slower pace of contraction.
All in all, number crunchers don’t seem to be expecting very gloomy readings for March, but downside surprises might be waiting. Still, the impact of these releases might be subdued as traders are likely to stay glued to Brexit developments.
ICYMI, the third time wasn’t the charm for the transition deal vote as parliament still rejected PM May’s plans. This puts the U.K. on track towards exiting without a deal on April 12, but keep in mind that the EU scheduled an emergency summit on April 10.
This week, yet another non-binding vote on the options, which include a customs union play, “soft Brexit” proposals, and “common market 2.0”, is scheduled this Monday before an indicative vote could be pushed by Wednesday.
In the earlier round, none of the proposed options secured a majority, but it’s worth noting that the customs union idea received the most votes. This should allow U.K. businesses to move goods around the EU without tariffs but prevent the U.K. from coming up with independent trade deals after Brexit.
Threats of resignation by cabinet members are still in play, keeping PM May’s leadership on the rocks. There’s talk of a fresh leadership challenge, snap elections, and a second referendum on whichever deal wins in parliament. Phew!
Missed last week’s price action? Read GBP’s price recap for March 24-29!