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The British pound [GBP] took a hit in Asia and is under pressure again in early London trading on news that the govt plans to create a Dec 2020 cliff-edge.
he plan, first reported by ITV overnight is that the Withdrawal Agreement Bill “will legally prohibit the government agreeing to any extension” according to a senior government official. The idea is that it will force the EU to offer a better deal with the prospect of WTO-exit looking at the end of next year. In practice it would erode all the positives of a large Tory majority and bring us back to previous position of GBP uncertainty rising rather than falling next year. If passed, it would mean further GBP downside.
The stock market has been boosted by a combination of factors – the prospect of an end to Brexit uncertainty, the removal of the threat of re-nationalisation following Labour’s defeat, and hopes that the interim trade deal between the US and China signals a rolling back of protectionism.
London’s strong performance was part of a global trend that saw all three of Wall Street’s major share price indices lifted to record highs amid optimism of stronger, faster growth. Chinese share prices hit a six-week high and oil prices also rallied.