The City is bracing itself for next week’s crunch vote on Theresa May’s Brexit deal with banks drafting in extra staff to work through the night responding to market volatility and investor calls.
MPs will finally vote on the Prime Minister’s withdrawal agreement on Tuesday after a month's delay, with traders, investors and analysts on standby to react to the outcome.
Barclays will deploy additional staff in its London, New York and Singapore offices to help clients manage market volatility on the night of the vote, the bank told City A.M.
Members of the bank’s FX sales and trading teams will start earlier and work later, while Barclays Research analysts and economists will follow developments “through the night” and feed back to clients.
AJ Bell also said it would “upscale resources” with more staff manning its trading helpdesk and customer services line, and provide market commentary to help customers manage their portfolios.
Hargreaves Lansdown is also preparing to boost capacity by around 40 per cent if the result leads to increased volatility and investor activity.
Analysts said traders had already priced in a defeat for May in parliament, after the Prime Minister lost two key votes in the space of 24 hours earlier this week.
Barclays head of European equity strategy Emmanuel Cau said a defeat for May “wouldn’t come as a shock” to the markets, while a victory would send stocks and the pound soaring.
He said: “If the withdrawal agreement passes, UK domestic equities and GBP could rally in tandem, as both are under-owned.
“If rejected, we expect UK domestic plays to be hurt the most, while exporters should fare better.”
BNP Paribas has also issued a note to clients ahead of the vote and said investors should consider a long position on the pound.
FX and sterling rates strategist Parisha Saimbi said: “We expect the pound to strengthen if a consensus builds for a second EU referendum - as we see likely to be the case - as market adjust to an increased probability of no Brexit and a reduced probability of a ‘no deal’.”
“We see the FX market as having priced in enough political and economic uncertainty for now.”
JP Morgan said sterling would surge by at least four per cent if parliament approves May’s Brexit proposals.
The bank’s asset management wing said avoiding a no-deal Brexit would allow the Bank of England to raise interest rates, pushing the pound upwards.