More arguments and threats within May’s government
There’s more rows going on in May’s government and between her and Brexit negotiator David Davis. There is newspaper talk and rumour that he might resign over the Irish backstop paper due to be issued by the government. The argument seems to be over setting a firm date for any backstop, with David worried that not setting one could leave the UK clinging on to the customs union via Ireland for a lengthy period, something he’s against.
As usual the UK press is making a lot of all this and the stirring spoons are out in force. For trading this, it’s equally messy. Firstly, I think Davis resigning at all is a low risk but if he does, the market effect is unknown. On one hand, losing your head negotiator half way through the negotiations is a very big negative but then as Davis is a staunch ‘Leaver’, him going might mean a softer exit.
As usual with Brexit trading, it’s really all up in the air once again. The safest thing to do is make sure you have any GBP trades well protected and managed, so that if we do get a big headline, you’re not going to get caught out on a big move. The quid seems to be ignoring it all right now but that might change on a tapebomb.