July 17, 2018 / 7:24 AM / a year ago

Daily Briefing: May girds for daily dose of Brexit rebellion

LONDON (Reuters) - New day, new Brexit battle for Theresa May. The UK prime minister won a series of parliamentary votes on her strategy to leave the European Union on Monday, albeit at the price of concessions to Eurosceptic hardliners.

Prime Minister Theresa May speaks at the Farnborough Airshow, July 16, 2018

On Tuesday, May faces a vote on a trade bill, one of a trio of bills that maintain continuity of trade arrangements with non-EU countries after Britain’s departure from the European Union. Rebels on both sides of the debate may try to change the bill, reflecting the deep divisions in both of Britain’s major parties just eight months before Departure Day.

At this stage, someone wanting a flutter might put money either way on a hard Brexit or no Brexit at all. And in another sign of just how fractious the Westminster parliament has become, the government is trying to send lawmakers on holiday early – but even that is facing a rebellion.

Barack Obama pops up in South Africa to give the 16th Nelson Mandela annual lecture on Tuesday. As Donald Trump systematically unpicks the legacy of his eight years in office, the former U.S. president is scheduled to talk about bridging divides and resisting oppression and inequality.

It could just be timely advice to South Africa's new president, Cyril Ramaphosa, as he tackles entrenched inequality decades after the end of apartheid. But many will be giving his text a close read for an implied criticism of Trump's tenure in the White House, particularly in the wake of Monday's extraordinary summit with Putin in Helsinki.


Oil’s 4 pct tumble yesterday – was that down to news of more Libyan supplies or deeper worries about economic growth?

Surely not a coincidence that Brent's fall to three month lows came on the same day as data showing a slowing Chinese economy? This morning Brent is trading flat around $72 a barrel and world stocks are flat too overall, though Asia has continued to slide – Hong Kong and China shares are again down 1 pct or more.

There is also the dollar, which failed to get a lift from yesterday’s robust U.S. retail sales data, perhaps indicating that this year’s rally may be running out of steam. The retail sales data gave Treasury yields a lift, but mostly at the short end, with two-year yields the highest in a decade.

The yield curve’s flattening momentum shows no real sign of abating though, with the 2s-10s curve down to 23.4 bps early on Monday. Again, worries about recession? The moves elicited a warning from the Minneapolis Fed's Kashkari to the effect the Fed needs to slow down the hiking pace.

The Fed, having raised rates twice this year, has hinted at two more in 2018. Let’s see what Fed chair Jerome Powell says later today when he starts his two-day testimony to Congress.

This side of the Atlantic, BoE governor Carney speaks to parliament. Sterling is flat today after PM Theresa May got parliamentary approval for her Brexit bill, but only just. There’s little cheer for the currency after she had to accept key amendments from arch-Brexiteers within her party.

Data today on UK employment and wages could give the pound further direction. On the earnings front, Goldman Sachs is the big one, after mixed readings from other U.S. banks last week. Reminder that Netflix subscriber growth disappointed yesterday, causing a slide in the N of the FAANGs group as well as other tech companies.

— A look at the day ahead from EMEA Head of Desk Jon Boyle and Financial Markets Columnist Jamie McGeever. The views expressed are their own —

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