Next Up For Gold Today...
UK PM Theresa May will this Today make a keynote speech on Brexit
We've known for a while that the PM will step up this Tuesday and reveal some of her Brexit strategy plans but there's mounting press coverage this week-end that it most certainly will be for a "hard" variety, and some.
Yesterday I posted that the PM was once again being urged to reveal more about her Brexit plans and today The Sunday Telegraph reports that May will say that Britain must now:
be prepared to leave the customs union to secure free trade deals across the world
regain full control of its borders even if that means ending single market membership
no longer be bound by European Court of Justice rulings after Brexit, despite claims to the contrary
unite after the "division" of the referendum by ditching the terms "Leaver" and "Remainer"
Contents of the speech are being closely guarded by the PM with a draft yet to be given to senior cabinet ministers but the speculation is gathering momentum despite denials from May's office.
She has long said that " Brexit means Brexit" but markets have reacted understandably to the uncertainty of exactly what that might entail. We can now expect further pressure on the pound in Asia and beyond if only on a "sell rumour/buy fact" scenario. What remains to be seen is, as has been the consistent case with events such as the Brexit vote, US election and Fed rate hike, how much is/becomes factored in and how far the markets gets ahead of themselves.
However, as I've long argued on these pages, what we've seen in the past 6 months by way of better than expected/hoped for economic data has been the product of a honeymoon period. Brexit hasn't been triggered yet and the rules haven't changed.
Even after May's speech on Tuesday morning at the historic Lancaster House venue the uncertainty will very much continue and we should expect the pound to remain undermined overall. I said in my personal Brexit vote article that I think leaving the EU will ultimately be beneficial to the UK, and that the pound should duly recover, and I stand by that.
It's just not going to be anytime soon.
