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  • UK MPs  voted 293 to 46 on early election to turn down a general election.
  • Johnson is adjourning parliament until October 14.

UK Parliament rejected PM  Johnson’s second bid for early general election and MPs  voted 293 to 46 on early election (Boris needed  434). Johnson is adjourning parliament until October 14 while the  government carries on with negotiating a Brexit deal with the EU and the  EU summit on October 17. Meanwhile, the bill preventing a no-deal Brexit on 31 October (requiring Prime Minister Johnston to seek a three-month extension) had  passed into law earlier and Johnson  indicated he’ll do everything he can to avoid a delay –  Despite the recent law change, Johnson says the UK will leave the EU on 31 October, without a deal if necessary.

Johnson has already met Irish Taoiseach, Leo Varadkar, in Dublin for talks on trying to break the deadlock over the Irish backstop arrangement. “Varadkar wants a deal but says the backstop is essential to maintaining peace and prosperity in Ireland. Both are willing to work together to find a compromise and are aiming for a deal at the EU Summit,” analysts at ANZ Bank explained.  

FX implications

GBP climbed overnight on expectations of a no-deal Brexit continued to fade, but the news that House of Commons Speaker, John Bercow (who is known for giving the floor to those who oppose a no-deal Brexit) plans to step down by 31 October saw gains unwind. GBP is flat in Asia on the election vote.