Sterling steady as May plays on
Theresa May gets to play Brexit for at least another day (two weeks in fact.)
- The strategic nous of Labour’s Yvette Cooper is also becoming clearer
- Cooper earlier backed a (stalking horse?) amendment aiming to hold the PM to a vote to delay Brexit
- But that plan was pulled at the last minute, leaving Cooper’s new amendment that simply noted a vote promised for 14th March
- In another surprise, it won government backing, passing 502/20
Other key developments
- Amendment protecting EU citizens’ rights agreed without a vote
- Labour’s Jeremy Corbyn got fully on board the Second Referendum train…though it’s going nowhere as it lacks a majority
- 20 Conservatives voted against Cooper’s plan whilst 88 abstained (AKA a minority)
What happens?
As things stand, the most likely fate of the government’s Brexit plan is still a defeat by 12th March, paving the way for a delay request
Sterling outlookThe cost of options expiring after 29th March continues to slide. In other words, demand to insure against or capitalise on sharp post-Brexit volatility has stopped rising
- In lieu of (likely) further twists and turns, it’s now a waiting game (including for sterling)
- Technically, note the pound is elevated above its 21-day average, which itself points higher
- But after a 4.5% surge from February lows, caution plays against that ebullient clip continuing
- After GBP/USD topped $1.33 for the first time since September, dips below are probable
- January’s $1.3216 high is a target
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