### POV: LABOUR SPLIT SEEN AS NO GAME......>

STERLING: ### POV: LABOUR SPLIT SEEN AS NO GAME CHANGER FOR GBP

-While the seven MPs who defected from the Labour Party wouldn't want to agree,

it's unlikely their withdrawal from Corbyn's oversight will change parliamentary

outcomes in any material way. The MPs' departure from Labour brings the party's

representation in the Commons down to 248 seats, a loss of 1% of total votes.

-One circumstance that could change the parliamentary maths: if a second wave of

MPs join the splinter group (most importantly, any Conservative moderates such

as Anna Soubry, Sarah Wollaston or Heidi Allen), this could erode entirely

Theresa May's confidence-and-supply agreement majority, making the passage of

her Brexit withdrawal proposals even trickier, thereby raising the possibility

of either a 'No Deal' Brexit or an extension to Article 50.

-GBP has taken the news in its stride, with spot rates barely budging.

Nonetheless, two-month implied vols (capturing the Mar29 Brexit day) are ticking

higher again having bottomed out in late January. PM May's Attorney General Cox

will seek to assuage concerns of lawmakers surrounding the Irish backstop

tomorrow.