Theresa May’s Brexit withdrawal agreement may not be that different from the one voted down in March, according to a BBC report. The UK prime minister has promised MPs a “new, bold offer” with “an improved package of measures” for them to vote on the week commencing 3 June.
The lack of progress on Brexit and the prospect of a “Brexiteer” taking over the negotiations after May’s departure are weighing on the Pound, which with little data or impetus to give it direction yesterday, 20 May hovered just above the $1.2700 and €1.1400.
Meanwhile, the Bundesbank released a report suggesting that the German economy could go into reverse in the second quarter of 2019.
Europe’s largest economy posted a 0.4 per cent growth in the first quarter. However, the German central bank said the recovery was the result of a host of one-off effects, including a short boom in car purchases and good weather allowing the construction to start earlier than normal – the factors that will be short lived as the Sino-US trade war continues to make the global outlook “extremely uncertain”. The Bundesbank also said that “a gradual rebound in economic activity is only expected for the second half of the year alongside a global economic recovery”.
The ongoing trade tensions between the US and China escalated further yesterday after Google announced it had restricted Huawei’s access to its Android operating system and some apps after the Trump administration blacklisted China’s telecoms company. Huawei is the second largest smartphone manufacturer globally and has faced a growing backlash over its connections to the Chinese government, which the company strenuously denies.
Today, European consumer confidence is the main release on the ticket. Market participants will look for clues on direction from Brexit and further developments in the US-Chinese trade war.
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