Brexit showdown looms in UK Parliament: fade EUR/GBP breakouts - TDS

 Analysts at TD Securities noted that on Tuesday and Wednesday this week, the UK House of Commons begins a series of votes on 15 amendments on the Withdrawal Bill made earlier this year by the House of Lords.

Key Quotes:

"Of note are two amendments on EEA membership and a negotiating stance in favour of a customs union (CU)."

"We don't expect the EEA amendment to pass, and while the CU amendment might just be approved, it's important to note that it does not require the UK to join a customs union."

"While some minor amendments might be approved, the more contentious ones are, on balance, likely to be voted down."

"FX/Rates Strategy: With the data and event risk calendar already overloaded, we think this week's votes are not likely to give either rates or FX markets a strong directional push."

"We are inclined to fade any breakouts that emerge in EUR/GBP."

"In rates we remain bearish on duration and continue to pay Aug 18/receive Nov 18 MPC-dated contracts."