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Pound Gains on May Confidence Vote Amid Brexit Delay Hopes

Published January 17, 2019

The New Zealand dollar opens lower this morning, as strong earnings released in the US improved market sentiment there, and markets prepare for further delays on the UK leaving the EU.

May’s Government Narrowly Wins No Confidence Vote

UK Prime Minister Theresa May’s government has won this morning’s no confidence vote 325-306. May will now need to work on delivering a plan b which she will still need to secure parliaments vote to pass the deal, or alternatively seek an extension on Article 50 to avoid a messy exit. Key sticking point remains the Irish border backstop. Labour party member Corbyn said that before any “positive discussions” could take place, “the government must remove clearly, once and for all, the prospect of the catastrophe of a no deal exit from the EU and all the chaos that would come as a result of that”.

Federal Reserve’s Beige Book

A summary of the state of US business across the central bank’s 12 regional districts released by the Federal Reserve, reported the Labor market tightened and wages grew moderately as businesses struggled to find workers at any skill level. The Fed reported the outlook for the economy were relatively positive, however businesses remain less optimistic with rising interest rates and increased trade and political uncertainty.

China’s Central Bank Injects Record US83bln To Stimulate Its Economy

China’s central bank injected a record $83 billion into the banking system on Wednesday, the highest ever recorded for a single day. The move follows China’s policymakers pledging to step up stimulus this year and do more to protect jobs and economic growth as it hit 28-year lows. The move signals the economy may be facing enormous stress.