Free Trial

### POV: LABOUR'S BREXIT POLICY SHIFT CLOSE...>

CABLE
CABLE: ### POV: LABOUR'S BREXIT POLICY SHIFT CLOSE TO MEANINGLESS FOR MARKETS
-While the switch may embolden Labour MPs (and cross-party remainers) to vote
against the government, it does little to unite backbenchers who have cited
numerous Lords amendments that, if voted for on June 12th, could force the
government to consider retaining EEA membership and forge a stronger cross-party
resistance to current Brexit plans. As a result, this does little to raise the
possibility of the government losing meaningfully at the bill's passage.
-Yesterday, the opposition Labour Party shifted policy, favouring "full access"
to the EU's Single Market and aiming for the "softest Brexit possible". The
announcement prompted a rally in short-end GBP implied vol and risk reversal
measures as traders saw an increased possibility of the Cabinet softening their
Brexit stance.
-Consequently, the demand seen for GBP upside protection today may be caught
offside. Labour's U-turn does very little, if anything, to make the cabinet's
interpretation of Brexit less likely. RISK: only a vocal climbdown by key
cabinet members will strengthen the 'softest Brexit possible' rhetoric.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.