Brexit baffles the pound
By Arnaud Masset
Here comes a long day for UK lawmakers: Parliament will start voting on Brexit alternatives. This morning each member will choose preferred alternatives: that with the highest support will win. The range of options is broad - more than 15 – encompassing a custom unions, a common market, no deal, revoking article 50 or even a second referendum. The votes are indicative, not binding. We doubt there will be a conclusion today.
GBP/USD has been trading sideways around $1.32 since the beginning of the week. EUR/GBP has stabilised around 0.8445. The UK must come to a solution before 12 April or it will be a no-deal Brexit. We believe that even in the event of no deal, the economic slowdown of the European Union will inevitably weigh on the single currency.
Did New Zealand signal a Fed rate-cut?
By Peter Rosenstreich
The Reserve Bank of New Zealand held its official cash rate at 1.75%, while the bank stated that the "more likely direction" for future rates would be lower. This increased the possibility of easing. The NZD reacted sharply to the dovish twist, falling over 1%. Speculation spread that the US Federal Reserve’s next move will be to cut rates. US treasury yields fell marginally while the greenback gained against G10 currencies.