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Another spoke in the Brexit wheel

Resolution postponed

Investors spent last week with their hopes pinned to a Brexit deal. On Thursday, the government agreed with the EU to a withdrawal bill, which was put to Parliament on Saturday. Although the day did not go exactly according to the Downing Street plan, it did sterling no real damage.

The Commons voted yes to an amendment intended to prevent a no-deal Brexit. With the amendment in place, the prime minister decided not to proceed with the underlying withdrawal bill at that time. The speculation this morning is that he might try to start from scratch again today, representing his bill sans amendment. To do so would risk a rerun of Saturday, even if the speaker were to permit the same motion to be debated twice in the same parliament.

Investors were only slightly disheartened by what they saw as a setback on Saturday. At worst it looks as though an imminent no-deal Brexit has been taken off the table. Having ended last week strongly, the pound is off its highs this morning but still the joint leader alongside the Swedish krona. It is 0.2% higher on the day with average gains of 1.7% for the week and 2.5% for the month.

No surprises elsewhere

On the world stage there were few distractions from the Brexit Saga, at least as far as London was concerned. The handful of economic data added little to the discussion and the IMF meeting in Washington threw up no surprises.

Thursday's UK retail sales data were roughly in line with forecast. Sales were flat in September and up by 3.1% from the same month last year. US housing starts and building permits both fell in September, as expected. Canadian manufacturing shipments were stronger than expected in August. Third quarter Chinese gross domestic product disappointed on Friday: Quarterly growth of 1.5% was as expected but at 6.0% the annual expansion fell short of the forecast 6.2%.  

The International Monetary Fund's annual meeting brought a host of central bankers to the podium. Recurrent themes included the need for fiscal - as well as monetary - stimulus and the effect of Trump's trade war. The IMF's recently-published World Economic Outlook sees global growth at 3.0% for 2019, its lowest level since the 2008-09 financial crisis.

Watching Westminster and Toronto

Like Friday's, today's agenda is decidedly Brexit-heavy. No ecostats are scheduled for release during the London session. Canada will be holding a general election. 

Rightmove's index saw residential property prices falling 0.2% in October and 0.6% higher on the year. Chinese house prices rose an annual 8.4%. New Zealand credit card spending increased by an annual 4.8%, considerably less than the expected 6.0%. German producer prices are going nowhere, up 0.1% on the month and 0.1% lower on the year.  

There is nothing else on the ecostat calendar until the UK public sector borrowing numbers on Tuesday morning. So, Brexit it is then. With ten days to go. 

GBP: Brexit optimism despite Stalemate Saturday

GBP: Brexit optimism despite Stalemate Saturday

USD: IMF sees global growth slowdown

USD: IMF sees global growth slowdown

SEK: Shares the lead with sterling

SEK: Shares the lead with sterling

CAD: General election today

CAD: General election today

CNY: Annual growth slows to 6.0%

CNY: Annual growth slows to 6.0%

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