Forex Analysis for Tuesday 14th March 2017
Monday: UK House of Lords passed the Brexit bill without the EU citizen rights or final vote amendments after House of Commons rejected amendments, with reports stating that Parliament also granted UK PM May permission to start Brexit. Furthermore, it is now expected that the UK will trigger Article 50 in the last week of March rather than this week, with UK Brexit Minister Davis stating Article 50 will be triggered by the end of this month as planned. (Newswires)
UK PM May is preparing to reject Scottish First Minster Sturgeon’s demand for a 2nd Scottish Independence referendum in next the 2 years, according to a government source. (Times)
The USD dropped on pre-Fed volatility. The US 10 year treasury drove upwards through 2.6% showing continued bullishness re the US economy. Global equities were flat or rising. The oil three day price drop was arrested with the price holding at just below USD49/bbl. The EUR’s recent rise reversed yesterday and the JPY weakened. The GBP was flat but the Article 50 reaction has been manifest this morning with a downwards move. We are risk-on but there is a caution around key risk events this week: US, Japanese and UK rate announcements and the Dutch election.
Tuesday: Chinese Industrial Production was essentially on target at 6.3% vs 6.2% expectation.
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