zerohedge.com / by Tyler Durden / Oct 12, 2016
Global stocks are pressured this morning after a plunge in the Thai stock market and currency on concerns about the king’s health and Fed hikes coupled with some more bad news out of Samsung which cut profit estimates by a third, while European stocks are suffering after Swedish telecom giant Ericsson issued a profit warning, sending its shares plunging 17%.
The big macro story is the jump in the sterling which soared as much as 200 pips after Theresa May accepted a debate on a motion from the opposition Labour Party today who are arguing for a ‘full and transparent debate on the government’s plan for leaving the EU’ and which will allow for MP’s to be able to ‘properly scrutinize’ the government’s plan prior to the start of formal negotiations. The motion will be debated in Parliament today. However, according to Bloomberg May did table an amendment that added that there shouldn’t be an attempt to block Brexit or undermine the government’s position and while there is no binding result attached the fact that there will at least be some discussion amongst Parliament is slightly easing some of those hard Brexit concerns this morning.
“The vote is a major concession that does reduce the room to maneuver for Theresa May’s government in the negotiation,” said Hans Redeker, Morgan Stanley’s chief global currency strategist in London. “That is currently read as positive for sterling.”
Meanwhile, the next potentially interesting event for the fate of sterling comes tomorrow where the High Court will deem whether or not an Act of Parliament is needed for Article 50 to be triggered. A second hearing is scheduled for October 17th. A loss for the government would then force the issue into the House of Commons and House of Lords which could lead to delays although we’d expect appeals in such an outcome. One to watch however.
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