UK government delegates are due to resume meetings with EU leaders today to secure legally-biding changes to the Irish backstop issue in the UK’s withdrawal agreement.
Stephen Barclay, the Brexit territory, and Attorney General Geoffrey Cox are in Brussels today to meet with EU leaders in the hopes that the government can agree on changes ahead of the next UK parliamentary vote. The vote is scheduled to take place by March 12th.
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Article 50 To Be Extended?
If parliament votes against the Prime Minister’s Brexit plan for a second time, May has said that she will then give parliament the chance to vote again. This time, it will be on whether it wants to press ahead and leave the EU on March 29th without a deal, or whether it wants the PM to ask for an extension to the Article 50 process.
A decision to extend Brexit will likely be GBP-positive in the short term. The market will certainly welcome the avoidance a no-deal Brexit which many, including the BOE, have warned could be disastrous for the UK economy.
However, if parliament votes in favor of pursuing a no deal Brexit, this could have sharp negative consequences for GBP and broader UK asset markets.
Macron Attacks Brexiteers
French president Emmanuel Macron has been one of the most vocal critics of the UK’s decision to leave the EU. This week, he was on the attack once again.
The French PM called Brexit campaigners “anger mongers backed by fake news.” He also lambasted the “lies and irresponsibility” of the campaign which Macron believes have the potential to drag the whole of Europe down.
Macron continued his message by imploring Europe to “stand firm, proud and lucid.” He even went so far as to claim that the EU has never been “in so much danger.”
In the open letter, published by 28 different European newspapers this week, Macron called “for a European renaissance” adding that the UK could “find its true place” in a reformed EU bloc.
Warning Ahead of MEP Elections
Macron’s letter comes just over two months ahead of the upcoming European Parliamentary elections. These pose an increased risk of seeing eurosceptic and populist politicians elected.
Macron claimed that Brexit symbolizes “the crisis of a Europe that has failed to respond to its peoples’ need for protection from the major shocks of the modern world.”
Macron raised the prospect of the UK staying in a reformed EU saying:
“There will be disagreement, but is it better to have a static Europe or a Europe that advances, sometimes at different speeds, and that is open to all?”
As the official Brexit date draws closer, we can expect to hear more out of key European leaders. Especially, of course, if parliament votes in favor of pursuing a no deal Brexit.
After piercing above the Q3 2018 high of 1.3304, GBPUSD has since seen some profit taking kick in. Price is now pulling back below the level. Any further retracement is likely to find support closer to 1.3004, keeping focus on a further topside run. Bulls will be looking for price to move up into the 1.3550s region next, completing the large ABCD pattern currently developing.