What’s coming next in the crazy world of Brexit?
- Vote tonight on May’s deal only (no amendments) 19.00 GMT.
- Outside chance it’s delayed or deferred for a day.
- May likely to lose but it could be close. Lots of MP’s changing sides.
- Last minute concessions possible (ERG/DUP).
It’s likely but not certain May will lose. There’s plenty of MP’s in all parties who are getting cold feet on going against the deal. If there’s enough of them, it could swing things May way but then May has to deal with the DUP, who could pull their supply agreement. We should expect some last minute haggling from May to the DUP/ERG/others but it’s not looking great right now.
If the vote fails today, we move to voting on no-deal tomorrow, which the ERG are even more scared about because they back having the no-deal negotiating tactic, so losing that option forces them closer to the deal because the alternative is no-Brexit, 2nd referendum etc, and that would mean the Conservatives potentially losing out on a General Election. That would make their current standpoint pointless because they are doing all this for political power and to take over the Conservative party.
This maybe just a hunch but I’m not sure if the ERG (or some of it’s members), and the DUP are fully out of the game, irrespective of their “official” positions. Never say never in politics.
To top things off, we then might have a vote on an extension on Thursday and we then get another can kick.
Trading wise, GBP doesn’t seem to have a real grasp on it all and is just running between the headlines. Expect a possible knee jerk move lower on confirmation of May losing the vote but as that’s expected, it might not be much. The bigger price risk is if it passes or the vote is very close.
For me, I chopped some of my core longs above 1.32 last night, and then went short separately from 1.3240 and 1.3205. I chopped some of that at just under 1.32 and then near 1.30. I’m still happy to play from both sides and I’m good with keeping the longs for now, and my stop is locked into profit on the short balance. All trades were delivered live in our trading room on the ForexFlow platform.