At some point this evening the House of Commons will vote on the EU withdrawal bill. If the government wins, the stage will be set for a softish Brexit. In the more likely event that the bill is voted down, a whole new chapter of uncertainty will be opened.
Investors are nevertheless optimistic that the eventual outcome will be more positive for the UK economy than a no-deal Brexit. Sterling had another good day on Monday, beating all but the rand and the NZ dollar, and the Kiwi was only ahead by a nose. The pound strengthened by an average of 0.3%, adding half a euro cent and two thirds of a US cent.
It is difficult to guess the reason for this late wave of support for the pound. Perhaps investors believe the government might win the day after all. Maybe they foresee a second referendum delivering a remain verdict. It could be that they imagine the whole thing grinding to a halt, leaving Britain in the EU after all. At worst, there is an assumption that B-day will be delayed beyond 29 March. That is certainly the punters' view: a postponement is odds-on at 1/4.
Overnight the Chinese authorities announced a slew of economic support. The finance ministry said it would "step up fiscal expenditure and implement larger tax and fee cuts". "Stabilising employment is the government’s top priority."
The People's Bank of China promised to make monetary policy "more forward-looking, flexible and targeted". The exact nature of all the changes was not made clear but, taken together, the noises from Beijing were enough to persuade investors that something is being put together that will address slower growth and declining international trade.
It was the commodity currencies and the Japanese yen that were most affected by the Chinese commentary. The South African rand took the lead, up by 0.5% against the pound, and the antipodean dollars were neck-and-neck with sterling. Japan's yen took a big hit, falling 1.1%: it prospered on yesterday's poor Chinese trade data and lost overnight when Beijing announced its plans.
The only game in town
This evening's Commons vote is by far the biggest item on today's agenda. There is no shortage of ecostats but they are not top-tier data and they pale into insignificance beside the Brexit story.
Overnight the NZIER reported that NZ business confidence had improved in the fourth quarter but only to the extent that companies were "less gloomy". Japanese machine tool orders continued to slide, falling by an annual 18.3%. French inflation was steady at 1.9%. Spanish inflation and Euroland's balance of trade are yet to come, along with US producer prices and the New York Fed's manufacturing index.
As for the Brexit vote, it is impossible to know how investors will react to the result. In theory, an unexpected win for the government would be positive for sterling, in that it would introduce some certainty to the situation. The expected loss would, of itself, bring nothing really new to the table: the important thing would be what the prime minister proposes to do next.