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Anglo-Saxons behaving badly

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The UK government lost the vote on its EU withdrawal agreement (no surprise) with less than a third of parliament backing the deal (surprise). The government faces a vote of no confidence today; media reports suggest they will win.
  • If the government win the confidence vote, the opposition Labour Party is supposed to back a second referendum. Labour Party divisions are likely to become more obvious if the leader, Corbyn, fails to do this. Prime Minister May will try to negotiate with the EU, which is saying it will not renegotiate. However "The EU would say that, wouldn't they?" may apply. Indecision in parliament is matched by indecision by sterling traders, who do not seem to know what to do.
  • The US government is still closed. Fortunately, the Federal Reserve still functions (the Fed is a quasi-private entity). More Fed speakers, including the generally hawkish Fed President George, reiterated the decisive view of a policy "pause" (while acknowledging more rate hikes may be needed).
  • Away from Anglo-Saxons behaving badly, there is final German consumer price inflation for December (not exciting). UK consumer prices are due and the Bank of England governor testifies on financial stability (in the absence of political stability).