I have been receiving a lot of questions around the roadmap to Brexit, and with the pantomime starting again soon the aim here is to dissect the possible scenarios to Brexit and provide probabilities in the matrix. Here expecting this to be completed by year-end with Boris sprinting for the finish line. The Government is vulnerable to lose the vote given the DUP stance, however, even with elections as a 'cummings' plan B the government looks set to get this ratified before Christmas.
Seems that the numbers are there to get this through tomorrow; tracking 12 Labour MPs will switch sides and vote with Johnson can make this 319 ayes....meaning as crazy as it sounds Labour MPs will give the narrow majority.
Those wanting to dig deeper into these discussions can see the imminent 'no-deal' risk has swung around drastically (although worth noting still remains in play) and has reflected in GBP. We traded some examples of the risk swings live here as markets transition between pricing in a crash and burn scenario vis a vis a gradual material slowdown:
In any case, an orderly Brexit is still less free trade in the short-term and will not mark a recovery for the UK economy. On the monetary side, BOE will not move till Q320. Good luck to those in UK markets, jump into the comments with your ideas and charts to further the discussions!
All the best.
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Elections are necessary to reset the Parliamentary board if the vote is turned down with DUP now on the other side...
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We will have more details here around 3:30PM (London time)
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Brexit deal passed by HoC ... Brexit finally confirmed
so are you still selling the GBP ? if you are, where are your targets for GU and GJ?
MEGALO1
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Greetings to the pig rider, Thanks for all the wonderful charts that you post with a higher intelligence imbedded in them, explaining to us lower intellectuals that we may understand the importance of your thought processes and analysis !! :) I've only been following you for about a week your charts are quite impressive to say the least. I'm still analyzing some of your charts that I may comment in the future from time to time or as events unfold that would pertain to your chart ideas.
Oh yeah, may I comment on Brexit, I believe that the old money in the parliament still gains from staying within the EU, and the EU cannot have the force of the UK too mutiny because it will create an avalanche of other countries on the cascading mutiny train. Their will be a last minute reprisal by the EU that will extend Brexit saves face for both the EU and UK so they can extend this dog and pony show beyond 2019 and the kabuki theater and the drama continuous yet into another year???
MEGALO1
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@MEGALO1, Looks like this dog and pony show, is coming to fruition just like my hypothesis and supposition conjecture might of postulated. MEGALO :)
Zink
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besides that... the forecast of dxy is down with all pairs xxx/usd up!!
ridethepig
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Agree @Zink USD highs are in for a very long time and I would expect all those who caught this move in EURUSD to hold safely...
Nice probability tree, thanks for your analysis! While I doubt we shall see GBP lower than Brexit lows, still expecting a pullback lower first before we go up.
ridethepig
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Thanks mate
zorrays
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If Parliament agreeing on the deal is the highest probability - I am assuming we have a high probability of GBP being bullish overall?
ridethepig
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I wouldn't call it bullish despite the massive rally @zorrays ...Brexit is still very negative from a Macro perspective despite how the media is selling a Boris 'deal' to the mainstream. We have so far only traded a conjecture leg around the Brexit impact, remember we are still yet to see the fact leg in the Brexit story unfold. To put simply, this GBP party (all on optimism for reducing access into markets) is a gift to smart-money who are licking their lips knowing the damaging fundamental impact is still yet to start.