Seven MP Army
The defection of seven Labour MP's yesterday was certainly a blow to Corbyn and it seems as though there could well be more to follow. Depending on which press you read, up to 50 more MP's could be ready to quit and join the movement, but not all from Labour. Tory's disaffected by Mrs May's Brexit approach could well take a stand and effectively carve out a new centre ground movement - pretty reminiscent of the Tony Blair centre - to try and become a force to be reckoned with. Professor John Curtice has said that this is an opportunity for politics to move out of the two party system, but questions whether they will grab the opportunity.
Those that have split should probably call by-elections, according to shadow chancellor John McDonnell. We're not sure what their legal obligations are to do so, but if they don't and we get more dissent, then Labour's position is going to be significantly weaker. This might well change their repeated calls for a general election too - and might even tip the balance to make and get them calling for a second referendum sooner (something their MP's want, but their constituents probably don't).
Staying with the UK; Honda are the latest car manufacturer to deliver some bad news. They'll be closing their Swindon plant, which employs 3,500 people. The plant won't close until 2022 and the company is consolidating all of its production to Japan. Brexit isn't their determining factor in closing the plant and a new EU-Japan trade deal will mean they can export cars to the EU without tariffs - so why not consolidate back home?
European elections in May seem a long way off, but polls are already spitting out predictions; The FT reports that Eurosceptic parties are set to win more than 20% of seats in the European Parliament. This might not change much, as they say it's unclear which parties would be willing to work with each other, but it's not brilliant for the project as a whole. another point well made is that voter turnout is abysmally low, at 42% last time, so though they represent the people, it's not necessarily representative of the people.
Elsewhere; there's been a few stories of late talking about central banks getting ready to pump more money into the system. This morning the FT give their reasons why they think another round of QE (QE4) will be on the way much sooner than we think. This is quite a complex read, but certainly worthwhile - if you don't fancy taking it on; the summary is that because central bank money is draining away from the market, there is more chance that credit won't be able to be refinanced as easily/at all. This means credit crunch round two. As central banks have a better understanding of what their actions have (in the short term at least) it's likely they'll get ahead of the curve and keep markets liquid by using their own - freshly created - cash balances.
Across the Pond; Trump's been hit by lawsuits from 16 different states! His executive actions to get his wall built are being called "a flagrant disregard of the separation of powers" and the red tape could well cause some delays to getting the funding apportioned.
Trade talks between the US and China are set to resume in Washington today and the market will be hoping for some more positive comments to keep up the optimism that they've been building in to their trade positions in the last few sessions.
Chinese company Huawei has been in the news a lot of late, but yesterday was the first time its CEO gave an interview to international press. Speaking with the BBC Ren Zhengfei talked about the US market not being the be all and end all to the companies success and that there are plenty of other markets that they can invest more in, including the UK. It's an interesting read.
Looking to today; UK unemployment numbers could provide some interest to the market, but likely the German ZEW (economic sentiment) index reading will be the bigger news - their economy is pivotal to Europe and the Euro and of late it hasn't been the powerhouse the continent needs it to be.
Have a great day.