A victory of sorts for PM May

Sterling is largely unchanged this morning after Theresa May’s victory of sorts in parliament last night, with her motion passing by a comfortable majority and all amendments to it failing, albeit one – which would have given MPs the opportunity to test the waters regarding different Brexit options – by just two votes. The pound is hovering around the 85.5p level against the euro this morning and just above the $1.32 level against the dollar, with the latter also little changed against the single currency at circa $1.13. Elsewhere, equity markets were flat (US) to slightly higher (Europe) yesterday, while core bond yields nudged up a little but have essentially been trading within narrow ranges all week

PM May will now put her Brexit deal to a vote in parliament for a third time next Tuesday. If it passes, she will seek a short technical extension of Article 50 running to the end of June; if not, a longer extension is likely. It is in the gift of the EU27 to grant an extension, though EU Council President, Donald Tusk, has said he will make the case for a long extension to the heads of government at next week’s summit in order to allow the UK to “rethink” its Brexit strategy

It’s notable that a number of Eurosceptic UK government ministers – eight in all – voted against an extension to Article 50 last night. There may be some read across from this to next week’s vote, as the prospect of a possibly long extension might concentrate the minds of the DUP/Hard Brexiteers and persuade them to vote for Theresa May’s deal

Data published yesterday by the CSO show that GDP in Ireland rose by 3.0% year-on-year in the final quarter of 2018, while GNP was down 0.4%. For 2018 as a whole, the economy expanded by 6.7% on a GDP basis and by 5.9% in GNP terms. So another year of strong growth, though as Bank of Ireland’s Economic Pulse tracker signalled, the pace eased somewhat over the course of the year. Looking to 2019, further growth is in prospect, but Brexit risks remain to the fore

Data due today incudes a final Euro area inflation reading for February, and industrial production and consumer confidence in the US