A second vote in UK parliament is taking center stage today. After the defeat of the new Brexit deal, a vote on whether to go ahead with a no deal Brexit is being voted on. Many are hoping this is going to be defeated and leave the UK with a final vote this week on delaying the March 29th deadline. The likely outcome (given the relatively low volatility) is that the can will be kicked down the road. This will not be good for UK businesses and banks which will most likely hold back on lending and expanding businesses among the uncertainty.
Meanwhile in the rest of the world there is a picture that is being built outside the events of Britain. The global economy is showing signs of slowing, being offset by central banks coming out with more dovish language as the start of the year rolls on. This has many investors wondering if central bankers are coming in preemptively to get ahead of a coming slowdown or adjusting to one that is already starting. With central bank rate changes taking about 18 months to flow into the markets properly, the language and guidance they are giving more important in the near term than actual changes to rates or asset purchases. The reasoning will depend on the data and vary by central bank.
In the US, there is more of an assumption that the Fed is being preemptive. Data (with the exception of the last jobs report) has been supportive of the economy. Inflation expectations have come down, but not in a severe way that will show easing as imminent. Data coming out today (like PPI) will help to build the picture around the Fed's stance on interest rates longer term.
For other banks, like the ECB, there are more tangible steps being taken. While the Fed is looking to be 'patient'