Over the weekend: UK snap election in the works over Brexit, NAFTA still a question mark

Market-moving headlines for the new trading week’s open were few but pointed over the weekend, with snap election plans coming into the light for the UK’s Prime Minister Theresa May following the rejection of her latest Brexit proposal by the EU, while the European Central Bank (ECB) is seeing some more hawkish language from within, and NAFTA renegotiations continue to go belly-up as the US, Canada, and Mexico wrangle for position in fractious talks.

UK snap election on the docket

As reported by the UK Sunday Times, PM Theresa May’s home team has been working on a contingency plan that involves a snap election to be held in November in a bid to head off hard-line Brexiteers in the UK’s Tory party who will be looking to wrestle control away from the PM and place it in the hands of the UK’s parliament, which is heavily populated by Eurosceptics who threaten to derail the entire talks process and steer Britain directly into a no-deal or hard Brexit.

ECB should gear for faster normalization

Over the weekend, the ECB’s  Eeald Nowotny noted that price normalcy is being achieved within the Eurozone faster than previously expected, and although the ECB has set a pace of no movement on rates for well over a year looking forward, the hawkish Nowotny is questioning the logic behind that decision given the EU’s economic situation, and the concern is that a too-dovish environment will begin to stifle economic growth looking forward and make the ECB’s own job harder than it already is.

NAFTA talks beginning to look like not-NAFTA

The US and Canada are digging in their heels on both sides of the NAFTA line, and as the US and Mexico continue to come closer to reaching a full-on trade agreement, the bilateral watering down of NAFTA is almost complete, as forward progress continues to come to a grinding halt as Canada holds things up. US officials over the weekend stepped up their rhetoric, threatening to completely abandon talks with Canada if the dairy impasse continues, instead choosing to just focus on a non-NAFTA agreement with Mexico.