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Market Update

EncoreFX’s daily market updates are written by our experienced and professional dealing team.

British Parliament Reject PM May’s Divorce Deal by 230 Votes

Published January 16, 2019

The British Pound and Euro saw the biggest moves overnight in the lead up to this morning’s historic Brexit vote.

British Parliament Votes Down PM Theresa May’s Brexit Deal

British lawmakers have rejected Prime Minister Theresa May’s Brexit divorce deal by a crushing 432-202 votes. With the clock ticking down to the 29th March deadline, the UK is now faced with a political crisis as the existing Brexit deal is now considered dead. May’s options include setting a course for a no-deal exit, delay Brexit, resignation, an election or second referendum. Labour leader Corbyn calls for vote of no confidence in May’s Government.

The NZDGBP hit a high of .5369 leading up to the vote and has since pared back to .5293 post the result.

ECB rate hike expectations pushed out to 2020

ECB head Mario Draghi spoke to the European Parliament on Tuesday after a report showed German economic growth slowed to its weakest pace in five years. Draghi commented the Euro zone’s economy faces a longer slowdown, is not heading for a recession but still needs support from the European Central Banks. The slowdown in growth has been driven by weaker activity in China Markets amid trade tensions between the US and China. Markets have pushed out expectations for the ECBs first interest rate hike in 8 years to 2020.

NZ Business Confidence Less Gloomy & NZ Dairy Prices Rise

NZ business confidence improved slightly in December with the New Zealand Institute of Economic Research (NZIER) survey at -18% up from -28% in the previous quarter. Firms views on future growth improved, however profitability remains weak.

NZ dairy prices saw its fourth consecutive rise overnight, rising +4.2% in the dairy auction.