UK finally means Brexit – Lloyds Bank

Analysts at Lloyds Bank explains that we’re set for a UK centric session, at least from a headline perspective as we’re set to see PM Theresa May trigger Article 50, following her closing remarks in PMQs at 1230, at which point Sir Tim Barrow will deliver a signed letter to EU  Council President Donald Tusk.

Key Quotes

“The activation of this will initiate the two-year process of the UK leaving the EU, paving the way for negotiations of exit terms, development of the new relationship and discussions over any prospective transitional arrangements. Given that the event has been well flagged, UK rates and GBP are at mid-range levels and there is unlikely to be any new information of significance, we see relatively little market impact.”

“Aside from the political drama, UK mortgage approvals represent the only major data release today. We forecast a larger-than-consensus drop, to 68.2k, which would reinforce the impression that consumer confidence may be coming under pressure. Partial data from the BBA last week suggest approvals fell last month. Structurally, approvals remain well short of the pace seen before the financial crisis.”

“Elsewhere, US Fed speakers scheduled to appear today include Rosengren, Williams and Evans, although only the latter is a voter this year. Evans – a moderate dove – recently suggested that persistent uncertainty around inflation and government spending could see two hikes as more appropriate for this year. The ECB’s Praet, who recently quelled some of the excitement building over the prospect of ECB deposit rate hikes, is also due to deliver a keynote speech.”