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In a dramatic turn of events along the Bexit saga, with  Donald Tusk’s ultimatum and statement on Brexit, PM May is taking the stand at  Downing Street.

GBP/USD  is now below the 1.32 handle at 1.3185.

Key notes leading up to PM May’s Downing Street statement (reported by The Guardian):

Statement by President Donald Tusk on Brexit

  • Tusk says EU will only give UK short article 50 extension if MPs pass Brexit deal.
  • Tusk did not explicitly rule out a long article 50 extension – But Theresa May’s comments earlier today effectively rule this out while she remains PM.
  • MPs now face a choice between passing Theresa May’s deal next week, and a no-deal Brexit.
  • Prospect of the Commons getting the time to use “indicative votes” to find an alternative Brexit solution may have been killed off.
  • Hardline Tory Brexiters will welcome this ultimatum, because they believe a no-deal Brexit is better than Theresa May’s deal and the prospect of Brexit now being delayed until after May now seems very slim.
  • Having the end of next week as a very hard deadline now creates a dilemma for Labour MPs. They are strongly opposed to May’s deal but, unlike some Tory Brexiters in the European Research Group, they are alarmed at what a no-deal Brexit might mean for their constituents. Given that at least 20 ERG Tories are certain to carry on voting against May’s deal (and it could be many more), May will only pass her deal with Labour help.
  • The DUP will be in a quandary too. Nothing said by May or Tusk today suggests they are going to get much new in the form of backstop concessions. Like the ERG, they are philosophically comfortable with a no-deal Brexit. But the economy in Northern Ireland would suffer disproportionately in the event of a no-deal Brexit, and the DUP may be more nervous than the ERG about taking responsibility for a scenario that could put some of their constituents out of business.

 Theresa May speaking and key comments:

  • Two years MPs unable to agree on way to implement, we will now not leave on time.
  • This delay is a matter of great personal regret for me.
  • Im sure you have had enough.
  • I’m on your side.
  • UK will not leave on the 29th  March.
  • I have writen to Tusk to request an extension to 30th June.
  • Now time for MP’s to decide.
  • I have written to Tusk to request short ext of Art 50 to 30th  June.
  • Not prepared to delay Brexit beyond 30th June.
  • I don’t believe you and I do not want a second referendum.