Theresa May opened her mouth and, predictably, risk sentiment was subsequently undermined.
After reports indicated that May would pull Tuesday’s planned vote on the Brexit deal, pushing sterling to 18-month lows and catalyzing a rally in Gilts in the process, the embattled UK PM is on the tape and the headlines are not encouraging.
“The government will step up no-deal Brexit preparations”, she said, in a speech that also indicated the vote on the current Brexit deal could be postponed until “after Christmas.”
She went on to say that she’ll “do all [she] can to get the deal over the line”, an assurance that will invariably be seen by the market as a tacit admission that it isn’t likely to pass on a first attempt or, perhaps, on any subsequent attempts either.
Stocks pushed to day lows on the headlines.
(Bloomberg)
Gilts built on gains and the pound extended Monday’s drop.
(Bloomberg)
“For as long as we fail to agree a deal, the risk of an accidental no deal increases,” May said, stating the obvious, while simultaneously saying what was best left unsaid (while markets are open at least).
“The government will step up its work for that potential outcome and the cabinet will hold further discussions on it this week”, she added.
There’s no sugar coating it. We try to walk a fine line between reporting what’s obviously negative news and not overstating the case. This is a situation where the brinksmanship is getting dangerous. They need to figure this out or, ideally, hold a new referendum so they can slam the brakes on this whole thing and put an end to this national nightmare once and for all.
Read more
