Brexit continues to drag on with investors having no idea what the outcome might be. UK parliament is stuck in gridlock and the EU seem unwilling to help. As we have long predicted, Brexit visibility was close to zero and probability pricing on outcomes was misleading. Despite uncertainty, GBP against EUR and USD remains in manageable ranges ahead of 12th April. In general, the thinking has shifted from damage to the UK economy to effect on EU industries. While investors have been quick to price in the economic result of separation on UK assets, EU exposure is now coming under scrutiny. Finally, we have scant hope that May and Corbyn will find a common plan for Brexit. We suspect the opposition labour party leaders primary objective all along was to put that vote back to the people. With the hope of overturning the EU Referendum (no a compromise of ultra soft Brexit such as EU customs union). The meeting is a massive political miscalculation by May playing right into Labours hand and breach of the prime minister own “red line”.
By Peter Rosenstreich
