Brexit negotiations finally began yesterday at 11am in Brussels with Brexit Secretary David Davis entering with a “positive and constructive” mindset. Davis said he is hoping to gain a “special and strong” partnership with the EU. EU negotiator, Michel Barnier, will be kicking off talks by agreeing key priorities and a set timetable. The ‘basics’ of the EU deal are expected to be negotiated until December, with the more complex parts being discussed later. The UK is currently set to leave the EU in March 2019.
Over the weekend, French President Emmanuel Macron continued his winning streak. Macron’s party En Marche! and its allies won a comfortable majority in the French Parliament, securing 350 out of 577 seats. His party did not exist a year ago and although the turnout hit a record low of around 42%, the victory does provide stability within the French government. The positive second round vote shows a boosted support for the young President and his legislative agenda.
Two FOMC members are speaking today, Robert Kaplan will be at the Economy and Monetary policy at the Commonwealth Club and Stanley Fischer at the Riksbank macroprudential conference. Anything untoward here could inject volatility into the Greenback.