So where did she think the votes were going to come from?
Well plausibly, The Grand Wizards (their words) of the ERG appeared willing to ignore their previous opposition to ‘Brexit Light’ and perform a complete U-Turn of support. One of them could take May’s seat, and can there be anything more honourable than falling on your sword for the greater good? Keeping police numbers up and homelessness down as Home Secretary? **ZING**
Maybe Corbyn would throw his principles out the window and vote for his old sparring partner just to deliver the knockout blow??? Maybe even the DUP were blagging all along, and would sacrifice all as a thank you for the Billion quid?
And you know what they say about ‘3rd time’s the charm’?
Except it wasn’t. She lost. AGAIN.
And this time the Bill was diluted to be little more than to have a majority of Parliament agree that the UK should leave the European Union by May 22nd and thus avoid participating in the upcoming EU elections. And in their lay one big problem: there was no more substance to it; meaning May’s gamble was that she’d get a majority vote for an EU Withdrawal Agreement by a certain date, but with absolutely no details on how we planned to do it.
And to be fair to her, that dubious offering worked well for Leave in June 2016.
And amongst the madness, there’s some currency rates to consider:
As you’d expect and as has become common, a defeat for the Government and the UK remaining in Brexit limbo saw the pound drop off to the bottom of the weekly ranges against its main currency pairs; breaching 1.16 vs. euro and knocking on the door of 1.30 vs. US dollar. Yet for the year-to-date these are still levels near the top of the range and a lot better than early December. Traders are as confident as they’ve been through March that there will be no No Deal.
In a parallel Universe, victory for May and in my opinion the rate would have spiked to the 1.18s/1.35s. Yet I doubt even that would have held long. Should the vote have passed and thus Brexit enter May’s ‘Phase 2’, we would have likely seen a staunch Brexiteer Conservative take the reins. An attempted renegotiation to offer the UK far more than the EU is willing to give could easily have increased bets on a No deal being the eventual outcome. Even May departing and a General Election being demanded would have made traders less certain, nervous and ‘short’ on sterling. The latter scenario is still very much on the cards.
For now we’ll remain in this 2% range on sterling, although a leaning in market sentiment towards an extended, softer Brexit, should be medium term sterling-positive.
The euro will remain fragile, on German manufacturing woes (multi-year lows) and the dovish-looking ECB plans. The US dollar, despite China trade wars, a downward revision on GDP to barely 0.5% q/q, and an FED in a holding position on rates, is still a destination for investors fearful of an uncertain future. I’d be short EUR/USD longer term, and be very bullish on the Greenback vs. commodity currencies.
Why? The Kiwi dollar is on a downward trajectory, after the RBNZ surprised traders with a statement that the next rate move would be a cut. Considering global slowdown concerns and little current appetite for risk (hence JPY and CHF attractiveness), the selloff of NZD could be a feature of Q2.
The Australian dollar also looks vulnerable as, despite jobs figures, as US/CHINA trade tariff talks continue to yield NO DEAL. That phrase could be haunting markets for some time yet.
