By Orbex

The battered vehicle that is Theresa May’s Brexit campaign trundles on. And today, it’s receiving a new lease of life from news overnight that the PM has secured the legal binding changes many MPs were calling for.

In a vote to be held in UK parliament later today, MPs will be asked to vote on five documents. The first two are the withdrawal agreement and political declaration penned last year.

The other three to be voted on are pursuant to the changes agreed upon between May and EU leaders over the last couple of days.

What Are The New Changes

The first new document addresses the issue of the longevity of the Irish backstop:

(3) the legally binding joint instrument titled ‘Instrument relating to the agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community’, which reduces the risk the UK could be deliberately held in the Northern Ireland backstop indefinitely and commits the UK and the EU to work to replace the backstop with alternative arrangements by December 2020;

The second document addresses the actions the UK government can take to ensure the backstop is only temporary:

(4) the unilateral declaration by the UK titled ‘Declaration by Her Majesty’s Government of the United Kingdom of Great Britain and Northern Ireland concerning the Northern Ireland Protocol’, setting out the sovereign action the UK would take to provide assurance that the backstop would only be applied temporarily;

And the third new document addresses the future of the relationship between the EU and the UK and Northern Ireland:

(5) the supplement to the framework for the future relationship titled ‘Joint Statement supplementing the Political Declaration setting out the framework for the future relationship between the European Union and the United Kingdom of Great Britain and Northern Ireland’, setting out commitments by the UK and the EU to expedite the negotiation and bringing into force of their future relationship.

So, with these new changes in play, will MPs vote in May’s favor this time around?

Expectations

Passing her amended Brexit bill through parliament today will be no easy task for May. Last time around, the PM suffered a historic 430 – 202 defeat. In order to gain the 116 new votes needed to win, May will need to gather support from across the political spectrum.

Unforunately, this has become even more divided in recent weeks. A new breakaway political group formed, counting both former Tory and Labour MPs as members. To add to this, Labour leader Jeremy Corbyn officially gave his backing to a second referendum.

Jacob Rees-Mogg, the Brexiteer Conservative MP and a firm opponent of May’s deal said that the changes are “[unquestionably] a step in the right direction.” However, he will be waiting to hear new legal advice from the attorney general before making his mind up.

Indeed, it seems the DUP are equally on the fence about whether to support May’s changes. And so again, it looks like MPs are waiting to hear the new legal advice.

If the attorney general can assure parliament that changes made amount to concrete, tangible legal aspects and not merely “promises of goodwill” then May stands a strong chance of her bill going through.

However, if the new legal advice concludes that the changes are too vague and bereft of substance, May looks set for another defeat.

What happens if May loses?

If May is defeated again, MP’s will then given a chance to vote again on March 14^th. This time they will be voting on whether the UK should press ahead with a no-deal Brexit or whether the government should pursue an extension to the current March 29^th Brexit deadline.

Technical Perspective

After trading back up to the 1.33 level, GBPUSD has once again been turned lower as price remains mid-bound within the bullish channel still framing price action. A break of the 1.33 level will be needed to keep bullish momentum in play. Otherwise, price is vulnerable to a reversal lower. However, the channel base and first support at 1.2968 are opening the way for a move down to the next structural support at 1.2784.

By Orbex