There’s a New Brexit Deal! 🎉
There’s a New Brexit Deal!
Brexit, take 4. Lights, camera, action! A crunch week of ‘tunnel’ phase talks between British and European negotiators is over, and a new deal is in the bag. Here’s what it means for investors around the world, and here’s what could happen next!
For markets, the harder the deal, the harder the damage. Smaller British stocks would be the first to get hit as they’re less diversified globally, but the USD-GBP currency pair could soar. This new deal is a complicated compromise. Boris gets his open Irish border with Northern Ireland (NI) kept in the UK’s customs area, and technocrats in Brussels get to keep forcing NI to abide by their rules (for now!).
But we’ve been here before. Former PM Theresa May saw her exit deal defeated three times by Parliamentarians, whose votes hold the key to “getting Brexit done!” Sitting in most seats are politicians who want to exit Brexit. They say they’ll reject this deal, but some think they’re plotting to do much more than that.
With carnage in the Commons and blusters from the benches, gusto for a people’s vote has gained renewed traction. Millions of Brits now want control with a second referendum, and there are plenty of politicians who’d like the option to remain kept alive on the ballot paper with BoJo’s new deal. Polls are tipping toward calling the whole thing off, and if that were voted for, markets would breathe a big sigh of relief. Johnson’s rivals “can’t have betrayed the will of the people,” because it was “only fair” to let the will of the people change.
Most traders are betting that on Saturday, Boris will fail to convert opposition or get the Irish DUP party onside with his deal, so it will be rejected. The Prime Minister would then be forced to sent another extension request to the European Union, possibly to build that negotiating tunnel a little longer. However, the EU’s leaders have indicated “no” already. If they mean what they say, markets could get a nasty shock. But this is politics, no one means what they say!