It reads like an April Fool’s story, but it’s unfortunately true; while a bunch of semi-naked climate change protesters demonstrated in the viewing gallery (allegedly even supergluing themselves to the windows), MPs voted against all four Brexit alternatives in another round of indicative votes.
It’s now just ten days to go until the UK is set to leave the European Union with no deal in place. The EU has been doing its best to act nonchalant, but chief negotiator Michel Barnier stated that a long extension was possible, given enough justification. A sign of jitters from Europe, or simply another attempt to make sure the EU doesn’t get the blame for the UK’s misfortune?
Not only are the odds of a no deal exit significant, but chances of a general election are also sizeable. Labour has already stated that it is on election footing, and it’s hard to see how the current government could negotiate anything after Brexit even if Theresa May’s Withdrawal Agreement miraculously scrapes a majority during a likely fourth vote.
Cable has slipped on the latest results but has already cut losses in half since the morning session began, rejecting the $1.3020 handle and climbing back towards $1.3050. Such a small move suggests markets are still yet to price in the high chance of a no deal; traders are holding out hope that the UK will somehow blunder its way into a longer Article 50 extension.
In this respect cable is somewhat akin to a cartoon character that has run off a cliff, yet continues to go straight until it eventually realises it has run out of ground. The gravity of the situation will hit at some point, leaving a big potential downside for GBP/USD unless the government can magic an almighty rabbit out of its incredibly empty hat.
The UK’s blue-chip index has risen for four consecutive sessions now, with oil companies pushing the index higher, helped by sterling weakness. Shell and BP are leading the index higher after yesterday’s Chinese manufacturing data pushed crude prices higher; unexpected growth in the Asian superpower has softened fears of a global slowdown. Shell is 0.6% higher, while BP has ticked up 0.5%.
Other strong movers include HSBC (0.8%), spirits-maker Diageo (0.8%) and Unilever (0.9%). On the other end of the scale is Rolls-Royce, which has dropped 2% after premature blade deterioration was found on two Boeing 787-10 jets equipped with the company’s Trent 1000 TEN engines; Singapore Airlines has grounded the planes.
Elsewhere global indices are softer after yesterday’s strong gains, with Asian stocks consolidating a seven-month high. European stocks are edging lower.
The crypto market has raced higher this morning, with bitcoin on track for its biggest one-day gain in a year after breaching $5,000 – a level not seen since November 2018. The 25% gains were quickly trimmed, but BTC remains up 15% at around $4,765.00.
Other major cryptos are enjoying strong gains as well; litecoin is 13% higher, bitcoin cash up 10%, ethereum 9% higher, and ripple up 8%. Crypto fans are celebrating the beginning of the long-prophesied bull market, but such jubilance is premature. Technical indicators suggest caution, with the RSI for BTC trending around 90 – anything above 70 is considered overbought.
The rally added $17 billion to the value of the crypto market in under an hour, but traders are struggling to identify the cause of the uptrend.
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