Goldman Sachs sees orderly Brexit with May getting deal through parliament

In its latest client note, Goldman Sachs’s Analysts said that the UK PM Theresa May could manage to seek an orderly Brexit by getting the Brexit deal on trade getting approved by the British Parliament.

Key Quotes (via Reuters):

“Our own base case is for an orderly withdrawal, although the tail risks have admittedly increased.”

“We see the UK and EU settling on a free trade deal covering goods but excluding most services.”

“While there may be no clear majority in parliament for any specific Brexit proposal, there is a majority to avoid the no deal outcome.”

“Although UK political dynamics have raised the likelihood of a no-deal scenario, we continue to believe it is relatively low.” 

“A ‘no-deal’ Brexit would be a risk-off event for global markets, causing Gilts to rally.” 

“While the Labour government would be unlikely to reverse course on Brexit, the combination of its softer position on Brexit and its domestic policy agenda would likely imply higher long-term yields.”