Citi discusses GBP outlook in light of the latest Brexit development.
"PM May, speaking in the Commons overnight, confirms there will be a statement on February 26 and then amendments/Meaningful Vote on February 27. At the same time, she categorically rejects Labor opposition leader Corbyn’s proposal to adopt a Customs Union in the Future Declaration in exchange for Labor support," Citi notes.
"The time line now is as follows – (1) Thursday is when a number of amendments (including PM May’s bid to gain an extra 2 weeks) will be voted on by the UK parliament. All eyes will also be on the new-and-improved Cooper-Boles amendment, which could force an A50 extension though may not appear until late February now (after the Meaningful vote). (2) In the interim, its back to the Irish Backstop with PM May reportedly trying to convince EU to accept a time-limited backstop
The EU has hinted it would accept such a proposal, but only if PM May can receive backing in parliament once it is accorded. Importantly, as Citi Research say, there does not seem to be an appetite for a “No Deal” Brexit or a willingness of government to actively pursue it," Citi adds.
