Sterling in suspense as speaker blocks MV3

The Speaker of the House of Commons has questioned the ‘legitimacy’ of government plans

A hastily arranged statement by the Speaker of the House of Commons has questioned the ‘legitimacy’ of government plans

Prospects of Meaningful Vote 3 going ahead were already looking shaky.

  • The government had flagged that it would pull its latest attempt if chances of success were low
  • William Hill and Ladbrokes had identically unfavourable odds earlier: 2/5  for 'no'; 7/4 for 'yes'
  • Northern Ireland’s DUP was “100% certain” not to back the deal this week
  • Other sceptics had belied indications that pro-Brexit Conservatives could soon thaw: “It is not too late to get real change to the backstop”, wrote Boris Johnson on Sunday

So the speaker’s surprise intervention got May’s deal off the hook: “government cannot legitimately resubmit…the same proposition…as that of last week”. Still, it’s obvious pressure on the government, which had yet to produce a substantive response at the time of writing, has ratchetted higher. A third vote must now be “fundamentally different”. Sterling dipped to the day’s low before reversing higher: there is as yet little new evidence of whether Brexit has been made ‘harder’ or ‘softer’, despite the drama.

  • In chart terms, sterling/U.S. dollar resistance towards $1.33 remains as heavy as it has been since the end of February
  • GBP/USD spiked to a $1.335 high on 27th February and then to near $1.338 last week and recoiled fast both times
  • The break outside of a narrower range of the last few sessions —capped by the same levels as above with a c. $1.32 bottom—hasn’t followed through
  • The overall structure looks weaker and further downward incursions aren’t ruled-out

Chart: sterling/U.S. dollar - hourly [1731 GMT 18-03-2019]

Source: Tradingview/City Index

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