It is going to be long day for UK lawmakers, as the Commons will start voting on alternatives on Wednesday. This morning, each MP will have to choose which alternatives he/she wants to back. Afterwards, the alternative with the highest support will win. The range of conceivable options is quite broad - more than 15 alternatives – and encompass a custom unions, common market, no deal, revoking article 50 or even a second referendum. Keep in mind that the series of vote is indicative; therefore we doubt there will be a conclusion today. Investors will have to keep patience.
GBP/USD has been trading sideways around $1.32 since the beginning of the week amid persistent uncertainties stemming from the Brexit situation. We anticipate that the fact that MPs took over the control wouldn’t accelerate the process and therefore we would surprise to see the UK asking for another extension. As of today, the UK will have to come with a solution before April 12, or it will be a no deal Brexit. EUR/GBP has stabilised around 0.8445. We believe that even in the event of a no deal Brexit, the economic slowdown of the European Union would inevitably weighs on the single currency, at least in the long-term.
