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Markets: traders tense as vote on May's withdrawal deal looms

Video Credit: Reuters Studio - Duration: 01:49s - Published < > Embed
Markets: traders tense as vote on May's withdrawal deal looms

Markets: traders tense as vote on May's withdrawal deal looms

London markets are pricing in defeat for UK prime minister, Theresa May's proposed Brexit deal in a key parliamentary vote next week.

But as Laura Frykberg reports, traders are braced for the impact the fallout from the vote will have on sterling and share prices.


Markets: traders tense as vote on May's withdrawal deal looms

This could be the calm before the storm..

As next week's crucial Brexit withdrawal deal vote..

Threatens to wreak havoc on the markets..

Although perhaps not immediately..

Given many traders have priced in a likely defeat for Prime Minister Theresa May's bill.

(SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING: "It's largely expected that she will lose and then really I think the focus will move on to what happens next?

Because ultimately when you look at how the UK government is comprised there is no majority for anything." A majority of traders though do believe Sterling will continue to slide..

While Friday saw it strengthen slightly by half a percent On reports that Britain's departure from the EU on March 29th could be delayed..

Recent history suggests such surges don't last.

(SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING: "Certainly if you look at the weakness of the pound every time that it's tried to rally it's slipped back from the highs against the dollar around about 1.28 and a half.

Certainly it's been losing ground against the euro for most of this year.." But if the impending divorce is amicable..

Sterling COULD gain more than 8 percent this year...says a Reuters poll of foreign exchange strategists... But that's a big if....100 of May's own MPs and the opposition could oppose the bill... Which for Remainers takes the UK too far out of the bloc..

And for Brexiteers..not far enough.

(SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING: "If Theresa May's vote wins then the pound is likely to surge quite strongly because a win is not priced in.

And I think it would be one of the biggest surprises since that June referendum when Vote Leave won." Banks are now reported to be drafting in extra staff for next week's vote... to work through market volatility and calls from investors... As Brexit continues to test Britain's motto of keep calm and carry on.

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