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Breaking News: Sterling Whiplashed 170 Pips as Market Awaits Parliament Approval

Posted by Fullerton Markets on October 18, 2019 at 5:03 PM


The members of Parliament will likely support the deal as they do not want to be blamed for a no-deal Brexit if it fails this Friday.

  • Sterling rose yesterday after leaders of 27 EU countries formally endorsed the new Brexit agreement with the UK. 
  • The gains were erased by the start of the NY session as markets start to price in the odds of Parliament accepting the deal.
  • UK PM Johnson told a Brussels press conference late Thursday that he was "very confident" of getting the deal through.
  • However, he has no majority among MPs, opposition parties have come out against the deal and even his parliamentary allies, Northern Ireland's Democratic Unionist Party (DUP), say they cannot support the terms.
  • PM Johnson will require 320 members to vote for his deal – a simple majority to get his Brexit deal through.
  • Boris Johnson started his premiership with an unprecedented string of seven defeats in a row in Parliamentary votes. So, Saturday’s vote will arguably be his most important yet.
  • We believe that we could be in for a surprise this Saturday as the members of the Parliament will not want to be the scapegoat for an extension in Brexit or worse, a no-deal Brexit.
  • Furthermore, this is the closest the UK has ever been to an orderly exit with the support of all the EU leaders, and probably the best deal they will ever get.
  • If members of the Parliament vote for the deal, GBP/CHF will rise sharply towards 1.3000.

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Fullerton Markets Research Team

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