Today's parliamentary vote
UK Parliament is back in action today after May's deal was rejected a day ago. The main order of business today is voting a no-deal Brexit. If today's vote fails, the UK could leave the EU without any kind of deal and we will find out if the promised mayhem unfolds.
The main motion says the government shouldn't leave the EU without a deal on March 29 and goes onto say that no-deal remains the default option unless and agreement is ratified by parliament. May said it will be a free vote for her party.
The voting will begin at 1900 GMT (3 pm in New York) but it will begin with various ammendments, which could be selected by the speaker at the start of the debate. The main one is the Spelman amendment (Amendment A), which would rule out a no-deal Brexit under any scenario. However Caroline Spelman said she no longer backs her own amendment. Normally that would mean it was withdrawn but it has some co-signatories would could push it forward. It's likely to pass.
The second amendment to watch is Malthouse (Amendment F) which is designed to endorse a "managed no-deal" Brexit. It's been defeated before. There are a handful of other amendments but none are expected to be selected.
The main resolution is May's and how it does will depend on the amendments but if it turns into an up-and-down vote on a no-deal Brexit, it's going to be overwhelming. My base case is that a max of 70 MPs vote against it. The DUP has already said it wants to keep no-deal on the table and surely most of the ERG do as well but the rest of the Conservative party and the opposition want to give businesses a bit of short-term safety and clarity and will overwhelmingly support the PM, even if it's a free vote.
As for market reaction, there could be a bit of relief in the pound but it's probably 95% priced in along with a win for an Article 50 extension on Thursday. After that, the risks start to skew to the downside again for the pound.
