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Parliament takes back control

Voting for votes

British Airways flight BA3271 took off from London City airport yesterday morning. The passengers thought they were going to Düsseldorf; the crew had filed a plan to Edinburgh so that is where they went. There was a bit of that in parliament last night.

The debate centred on a cross-party amendment that would claim time in the Commons for indicative votes on possible ways out of the Brexit gridlock. The government thought it was going to reject the amendment but MPs had a different plan. They won the vote by 329 to 302. So on Wednesday the house will debate and vote on a series of options, such as membership of the customs union or a second referendum. Because it could improve the chance of a more benign Brexit, last night's vote ought to have been helpful to the pound.

Briefly, it was. But in general investors were not overly impressed. The prime minister had already made clear that she felt under no obligation to honour the results of indicative votes: she would only do so if they were in line with the Conservative manifesto. So why are they bothering? Another amendment last night would have prevented a no-deal departure without parliament's approval. It would have been positive for sterling but it was voted down 311 - 314.

Swapping ends

Away from Westminster there was not a great deal to entertain or educate investors. The lack of stimulus was helpful to risk-appetite and there was a reversal of Friday's flight to safety, which resulted in Japan's yen and South Africa's rand swapping ends. Sterling shared last place with the yen.

Perhaps that sounds worse for sterling than it actually was. The pound lost an average of 0.3% to the other major currencies. It was down by little more than a dozen ticks - 0.1% - against the euro and US dollar.

The brief ecostat agenda brought improvements in German business confidence and a five-point decline in the Dallas Fed's manufacturing index, from 13.1 to 8.3. Overnight New Zealand reported a small but unexpected $12 million trade surplus for February.

Intermission

Tuesday is not quite a day off for parliament but most of the Brexit-related stuff is housekeeping, governed by standing order 118 (6) and not subject to debate. The only vaguely contentious item is a call for the government to publish an analysis of the economic impact of Brexit.

There is not much to be had from the economic data either. Euroland statistics already out show German consumer confidence declining from 10.7 to 10.4 and French gross domestic product expanding by 0.3% in the fourth quarter of 2018. The only other European figures are for Swedish producer prices.

The US data cover housing starts, building permits, house prices and consumer confidence. Senior officials of the Federal Reserve, Bank of England and Reserve Bank of Australia will be making speeches. Tonight the Reserve Bank of New Zealand is expected to keep its Official Cash Rate steady at 1.75% for a 29th month.

GBP Not helped by Commons developments

GBP Not helped by Commons developments

JPY Shares last place with sterling as risk-aversion fades

JPY Shares last place with sterling as risk-aversion fades

EUR and USD only slightly ahead of sterling

EUR and USD only slightly ahead of sterling

ZAR Leaps from last to first place

ZAR Leaps from last to first place

NZD No change to rates expected tonight

NZD No change to rates expected tonight

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