UK PM May announces she will seek Brexit extension

The PM will ask for an additional three months from the EU to negotiate a Brexit deal through the House of Commons.

In a press conference staged today, UK Prime Minister Theresa May has announced her intention to request an extension to the March 29 Brexit deadline. The PM will ask for an additional three months from the EU to negotiate a Brexit deal through the House of Commons.

The move was widely expected, but the shortness of the requested extension has seemingly surprised market participants. Though the Pound has recently rallied on the basis that an extension of the deadline would materialize, price action suggests traders were hoping for one that was longer in duration.

The anxiety have been compounded by news released prior to PM May’s press conference, that reported President of the European Council, Donald Tusk, believed the EU ought to only grant an extension to the UK on the condition the UK Parliament first pass PM May’s Brexit deal – a presently unlikely proposition.

As a consequence of the overnight developments, the Pound has tumbled below the 1.31 handle, and 10 Year UK Gilts have dipped to challenge multi-year lows, as traders lower their bets that the Bank of England will have the free-air to hike interest rates in the near-future.

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