Macro Digest: The Brexit deal that keeps on giving Macro Digest: The Brexit deal that keeps on giving Macro Digest: The Brexit deal that keeps on giving

Macro Digest: The Brexit deal that keeps on giving

Steen Jakobsen

Chief Investment Officer

Summary:  The European Union quickly agreed to UK Prime Minister May's Brexit deal, but her true challenge remains getting it through Parliament. Labour have voiced their opposition to the deal, as has the DUP.

Click here for the full text of “Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community as endorsed by leaders at a special meeting of the European Council on 25 November 2018”.
Brexit deal
Source: Bloomberg
Our analysis

This was the "easy part" of the Brexit deal – agreeing with a desperate European Union. The vote is unlikely to carry in the UK Parliament, which is setting up additional nervousness and volatility; Prime Minister May is looking to get a parliamentary vote by Christmas.

We remain seriously concerned about the UK economy. Our Credit Impulse reading for the country has collapsed to unheard-of lows, suggesting that the UK economy could be recession-driven by the summer of 2019.
Credit impulse, consumer confidence, and new car registrations
We forecast the vote to be a loss for PM May (with probability at 70%). Any rally in GBP should be sold (critical cable support sits at 1.2660), as the UK parliamentary system is working its way towards a non-solution and as such risks a handover of control in Parliament despite the lack of any real alternative. The ultimate price could be a split of the Conservative party before 2019 is over.
GBPUSD, source: Saxo Bank
This morning saw EU officials wave goodbye to their stormy but memorable cross-Channel marriage. Following 20 months of acrimonious negotiations, the EU gave its OK after less than an hour of discussion.

The EU described it as a “orderly withdrawal”, and then immediately returned to its old, opposition-intimidating ways with EU Commission President Jean-Claude Juncker commenting that "...anyone in Britain who thought the bloc might offer improved terms if MPs rejected the deal would be 'disappointed'".

Reuters carried the British opposition response, which was no kinder:

"Britain’s main opposition Labour Party will oppose the government’s Brexit deal in parliament, its leader Jeremy Corbyn said on Sunday, describing the agreement approved in Brussels as “a miserable failure of negotiation”.

“This is a bad deal for the country. It is the result of a miserable failure of negotiation that leaves us with the worst of all worlds. It gives us less say over our future, and puts jobs and living standards at risk,” Corbyn said in a statement.

“That is why Labour will oppose this deal in parliament. We will work with others to block a no deal outcome, and ensure that Labour’s alternative plan for a sensible deal to bring the country together is on the table.

If the easy part for PM May was to make a deal with an EU desperate to close the talks, the focus is now on Parliament. Sunday saw the deal rejected by Labour (see above) as well as the 10 Democratic Unionist Party MPs that secure May's majority in Parliament.

UK media also insist that up to 90 lawmakers from her own Conservative party have said they will vote against the deal. 

In the face of all this, can May really expect a successful vote by Christmas? It appears unlikely.

More on Brexit from: The Financial TimesThe Guardian, and The Economist.


The Saxo Group entities each provide execution-only service, and access to analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Inspiration Disclaimer and (v) Notices applying to Trade Inspiration, Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular, no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Select region


Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.