##POV: MARKETS BETTING AGAINST BREXIT: Tough.....>

UK: ##POV: MARKETS BETTING AGAINST BREXIT: Tough to say with any confidence how

the Brexit saga will end up, but there have been some subtle yet big shifts in

markets over the last 24 hours amid the Parliamentary defeats for the Gov't, the

'Grieve Amendment', and the advice that the UK can unilaterally revoke Art. 50.

- Based on implied odds on Betfair, punters now think the UK has roughly 49%

chance of leaving the EU by March 29 2019, up from about 33% in early Nov.

- Another Brexit referendum before 2020 is now more likely though still not

odds-on (43% implied, though this is up from under 30% in early Nov).

- Sell-side opinion is shifting too: JPMorgan reported this morning that it sees

chances of the UK remaining in the EU at 40% vs 20% previously.

- Potential for a softer Brexit outcome is pushing UK rate expectations higher

vs US and Eurozone: the H9-H0 and M9-M0 spreads of Short-Sterling vs Eurodollar

and Euribor futures have moved to / near contract highs.

- See charts: http://marketnews-m.objects.xtenit.com/BRXL9L0.JPG

- This is a subtle shift - but for the first time in a while, UK tightening

post-March 2019 is starting to look more aggressive than in the Eurozone and US.