Intraday Market Thoughts

Brexit Deal Seeks 320

by Ashraf Laidi
Oct 18, 2019 0:14

GBP pushed to a fresh 5-month high of $1.2990 after news of an agreement on renegotiating the Brexit deal between the UK and the EU. Now the deal will be voted upon by the British Parliaments in a special session on Saturday, requiring the backing of 320 MPs to pass. The looming danger of defeat from ongoing DUP opposition is the major source of risk to GBP trades. We are also watching crucial technical dynamics in US & European equity indices vis-a-vis some of their sectors. The DAX30- trade was stopped out early Thursday and 2 new Premium trades were issued on Thursday evening.

Click To Enlarge
Brexit Deal Seeks 320 - Mystery Chart Oct 18 2019 (Chart 1)

The new deal differs from Theresa May's Withdrawal Agreement via more alignment between the EU single market and Northern Ireland. The latter will remain an entry point into the EU's customs zone and products entering Northern Ireland will not be charged as long as they are not deemed risky to leave the border.

Fighting for 320

Considering the DUP's opposition, in order to obtain the minimum 320 votes in Parliament for the deal to be passed on Saturday, Boris Johnson must win as much as support as he can from the 287 Conservative MPs, as well as the 23 former Tory MPs) most of whom were dismissed from the Party after they rebelled against his decision to prorogue parliament). The key question is will enough Labour MPs vote for the deal to reach the total 320. One crucial issue is the “constituency factor”, which could force undecided Labour MPs to vote alongside their predominantly Brexiter constituency.


Latest IMTs