May Reportedly Preparing 'Timetable For Resignation' As EU Weighs Brexit Extension

Update (12:10 pm ET): Speaking in Brussels, Donald Tusk said that the approval of May's request for a brief Article 50 extension is 'possible' but would be conditional on a Commons vote in support of the withdrawal agreement (note: the agreement has already been twice rejected by the Commons, which has also already voted in favor of an extension). Meanwhile, Tusk said he 'does not foresee' an extra EU summit to focus on the Brexit catastrophe, though, if there's movement on passing the WA, he wouldn't rule out a meeting of the European Council.

In summary, Tusk said EU is prepared to let it go down to the wire - and if the UK can't pass May's withdrawal agreement, then no dice on the extension.

He also reiterated that the EU won't reopen the withdrawal agreement.

In other words, though cable didn't react much to his statement, a 'no deal' exit just became even more likely.

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Update (11:30 am ET): Supporting what we said earlier about May potentially using tonight's speech (note: No. 10 insiders have said she would not be making a speech tonight) to set out plans for her resignation, one independent twitter journalist has noted that rumors are swirling that May might lay out a timetable for her resignation tonight.

According to a steady drumbeat of reports in recent weeks, May has lost the confidence of most of the members of her cabinet, with some speculating that she won't make it until the summer. As a reminder, the PM only survived a Tory no confidence vote last year by promising she would not lead the party into the next general election.

Meanwhile, Commons speaker John Bercow has approved an emergency debate on May's extension request, while European Council leader Donald Tusk is expected to make a statement in the near future about May's request that Article 50 be extended until the end of June.

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Update (10:25 am ET): The latest Brexit headlines cast May's dilemma into stark relief: The EU is giving May another in a series of ultimatums. The French Foreign Minister has reportedly said that May's extension request will not be approved unless she can guarantee that she can pass her deal by the deadline.

In her letter to Tusk requesting the delay, May said she's "confident" that she can push the deal through, leaving MPs utterly baffled after Parliament has repeatedly demonstrated that her deal is wildly unpopular, and that Brexiteers would rather force a 'no deal' exit than risk the UK becoming a "vassal state" of Europe.

Meanwhile, speculation about May possibly resigning is once again picking up.

Stoking that speculation are unconfirmed reports that May will give a speech outside No. 10 on Wednesday night.

Meanwhile, Make UK, a manufacturers' industry group, has offered another apt assessment of the Brexit chaos: "We are moving from farce to tragedy."

Per the FT:

'We are moving from farce to tragedy.' ‘The only thing likely to worsen the current picture is leaving the EU without a deal, which would be catastrophic for the manufacturing sector which is so dependent on frictionless trade, common standards and regulation.'

'As a result, we conditionally support the Prime Minister’s decision to seek a short extension to Article 50. We do so on the express condition that the Government and Parliament use this time to relentlessly pursue a clear outcome that protects our trading relationship and provides certainty as quickly as possible. Delay for delays sake will simply make an appalling situation worse.'

Analysts at UBS expressed a similar sentiment through the lens of markets:

"There really is nothing intelligent to say on the subject of Brexit at the moment, and the best approach is probably to ignore it."

Appropos of nothing, the Washington Post pointed out that Wednesday marks 1,000 days since the Brexit referendum.

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Update (9 am ET): Mays' request for a short-term extension has been met with a mix of anger, shock, frustration and disbelief from both opposition MPs and Brussels bureaucrats.

First, the MPs:

Meanwhile, the FT reports hat Jean-Claude Juncker has already warned May against requesting a Brexit extension that would push the UK's exit past May 23, to avoid creating legal complications tied to the European Parliamentary elections (of course, there's reason to suspect that 'legal complications' aren't Juncker's driving animus: with eurosceptics already expected to make unprecedented gains in the upcoming vote, the UK participating in the vote could tip the scales toward a complete takeover).

Earlier, the EU had hinted that it would want a lengthy extension, or none at all, while May suggested that she would resign if a longer extension was forced upon her.

At any rate, Juncker says a decision is unlikely until next week.

Here's a takeaway from this morning's PMQs, courtesy of the FT:

  • Second referendum supporters are demanding she put her deal to the public.
  • Soft Brexit supporters want indicative votes to find an alternative way forward.
  • Hardcore Brexiters have expressed anger that the UK won't leave at the end of next week as promised.
  • Meanwhile the EU has already signalled it will oppose an extension to June 30, as requested.

And on CNBC, they're already trying to parse how a 'no deal' Brexit could be 'good' for stocks. No deal = weaker pound = boost to UK megacaps.

So no matter what, buy stocks.

And cable just can't catch a break.

Three

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Update (8:30 am ET): Just when the situation couldn't get worse for May and the UK, a leaked report suggests in the most dire terms that the 11th hour breakthrough May had been hoping for at this weekend's summit probably isn't going to happen.

According to headlines citing a leaked EU paper, the bloc will likely reject May's request for a short-term Brexit extension, according to the FT. Ransquawk has more on why:

Article 50 extension to 30 June would be legally and politiclaly difficult; main options for EU leaders are to delay Brexit until before 23 May, or at least the end of 2019, according to an EC document; adds multiple extensions would keep EU in a limbo.

UK PM May says taking part in EU's elections not in anyone's interest; adds she wrote to EU's Tusk requesting A50 extension through 30 June, adds not prepared to extend Brexit beyond 30 June; the govt's intention is still for a third meaningful vote.

To sum up: the EU insists that, if an extension is authorized, it must be a long-term extension. May insists that's politically unfeasible. It appears Europe and the UK will continue working at cross-purposes right up until the UK falls off the 'no deal' cliff.

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Having submitted her request for a three-month Article 50 extension to European Council President Donald Tusk, Prime Minister Theresa May has settled in to what's bound to be another contentious session of PMQs - where, rumor has it, frustrated Tories might demand May's resignation from the floor of the Commons. Cable has drifted to its lows of the session on the news, a sign that traders apparently haven't finished processing the fact that a no-deal Brexit looks more likely than ever (a stark departure from the mood late last week, when many hoped that May's threat of 'no Brexit at all' might just become the reality). But just because the currency is moving, doesn't mean anybody can say for sure exactly what's going on, or what traders should expect.

Two

In her letter to Tusk, May writes that she is "confident" the UK would leave the EU in an orderly fashion according to the terms of her Withdrawal agreement (which the speaker has already ruled cannot be brought for a third vote without substantial changes), if only they had a little more time...

...But if anything has been learned from the past two weeks of unmitigated Brexit chaos, it's that this is probably the one scenario that we can conclusively rule out.

Unfortunately for traders (UK bears like Steve Eisman excepted) and politicians who have been hoping for some kind of breakthrough at this weekend's summit in Brussels, one MP, purportedly a May loyalist, no less, offered a frank assessment of the government's approach - which, at this point, is looking more like political masochism.

Per the FT's Henry Mace:

“All we know is it’s a f****** mess. That’s the only universal truth... But what else could she do [than request an extension until June 30]?”

Meanwhile, Jeremy Corbyn is doubling down on Labour's push for a second Brexit referendum, presumably hoping to capitalize on the chaos.

You know it's bad when even the Guardian has no idea what to expect (the best it can do is offer a tally of every reason why passing a deal, or reaching a new compromise with the EU, is extremely unlikely). All Parliament can do, at this point, is once again try to seize control of the situation, though, if the EU rejects May's request for an extension, it's unclear what that would even accomplish.

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