Treasury prices are higher and the curve flatter ahead of today’s Brexit vote before U.K. Parliament. Yields were initially higher overnight on reports of more stimulus coming from the Chinese government, but uncertainty surrounding today’s Brexit vote took over once London markets opened. British lawmakers will be voting on four amendments, and if Prime Minister May loses today’s vote, the current assumption is that the planned March 29 exit date will be delayed. Reports surfaced that German Chancellor Merkel had offered concessions to May in the event that today’s vote fails, but Merkel quickly denied those reports, which helped fuel the rally in European and U.S. rates this morning.

In an interview with Fox Business Network yesterday, Fed Vice Chair Richard Clarida echoed recent Fedspeak suggesting more patience in 2019 from policymakers. “A lot has happened since the first week of December,” said Clarida. He also noted the recent softness in global growth data and downplayed the importance of the FOMC participant forecasts for the fed funds rate.

Jason Haley
Managing Director, Investment Management Group