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BNP Paribas - Stay long on sterling, Brexit delay 'inevitable'

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BNP Paribas - Stay long on sterling, Brexit delay 'inevitable'
FILE PHOTO: British five pound banknotes are seen in this picture illustration taken November 14, 2017. REUTERS/ Benoit Tessier/File Photo   -   Copyright  Benoit Tessier(Reuters)
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LONDON (Reuters) – BNP Paribas on Wednesday advised clients to retain their long position on sterling, sticking to its prediction that Britain’s departure from the European Union would be postponed even if a deal were agreed.

Lawmakers on Tuesday demanded that Prime Minister Theresa May return to Brussels to renegotiate the Brexit deal in order to replace the so-called Irish backstop, potentially putting her on a collision course with the EU.

BNP Paribas said however its base case was unchanged, advising staying “long” sterling.

“The can has merely been kicked down the road. MPs will have to decide again on 14 February whether to accept the deal on the table, leave with no deal, or extend Article 50. We think the latter will prevail,” they added.

(Reporting by Sujata Rao, editing by Dhara Ranasinghe)

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