Brexit uncertainties are rising and deteriorating confidence, long EUR/GBP
If Prime Minister May cannot get Parliament to back her deal with the EU by March12, she'll present the idea of a no-deal Brexit to lawmakers on March 13. If that is similarly rejected, there'll be a vote on extending Brexit negotiations on March 14.
- Prime Minister May might ask for a short, one-off extension to the Brexit deadline, which is likely to be till the end of June.
- This concession seems to have satisfied rebellious Tories who were planning to vote in order to bind May's hands.
- But Brexiteers seem to be unperturbed, perhaps because they think they could still get a no-deal Brexit in the first half of this year.
- The pound pared some gains as May said her preference was for a no extension to talks
- A no-deal may lead to a second referendum. This might be a nice idea, but it’s hardly guaranteed to fly.
- Moreover, it’s important to consider what sort of questions might be on offer, especially as the government remains committed to "delivering on Brexit."
- EUR/GBP may have broken its weekly support, but it could be a false break if a no-deal is put on the table.
