Weekly Comic: Markets Take Brexit Drama, U.S. Government Shutdown in Stride
Investing.com - Market focus was largely attuned to political developments in the U.K. and the U.S. this week as traders awaited further developments surrounding the latest Brexit drama and the U.S. government shutdown.
In Europe, Prime Minister Theresa May won a confidence vote in the British parliament on Wednesday and then appealed to lawmakers from across the political divide to come together to try to break the impasse on a Brexit divorce agreement.
Lawmakers voted 325 to 306 that they had confidence in May's government, just 24 hours after handing her European Union withdrawal deal a crushing defeat that left Britain's exit from the bloc in disarray.
With the clock ticking down to March 29, the date set in law for Brexit, the United Kingdom is now in the deepest political crisis in half a century as it grapples with how, or even whether, to exit the European project it joined in 1973.
In other political news, the partial U.S. government shutdown — the longest in history — has extended into its 27th day, as a standoff between Democrats and the Trump administration over the president's border wall money shows no signs of being resolved any time soon.
Despite the political turmoil, global stocks have largely weathered the storm, as traders took solace in dovish comments made by Federal Reserve Chair Jerome Powell, who made the case for patience and caution on interest rate hikes in a speech earlier this month.
While the Fed's forecasts indicate two more rate hikes in 2019, traders of contracts tied to the central bank's policy are betting that the U.S. central bank will not deliver a single rate hike this year.
“There’s a lot of speculation that we’ve seen the end to the rate-hike cycle and many people are even talking about rate cuts this year,” said Bart Wakabayashi, Tokyo branch manager at State Street (NYSE:STT) Bank.
-- Reuters contributed to this report
Related Articles
BOJ to retain ultra-low rates, global slowdown raises fresh policy challenge
GM, facing losses in Brazil, seeks tax breaks in Sao Paulo state
U.S. rejects offer from China for preparatory trade talks: FT
