Flex it like Brexit: confused investors cling on to idea of a grand fudge | Nils Pratley

Buy or sell? No one knows, but an unpalatable Brexit deal and a falling pound could be toxic for a weak prime minister

If Theresa May's Brexit deal faces a humiliating defeat in the Commons - which is a popular opinion in the wake of Jo Johnson's recent resignation - the currency markets don't seem to have noticed. Sterling fell a little on Monday morning but the instinct to celebrate anything that looks like "progress" towards an agreed deal returned in the afternoon when Michel Barnier, the EU's chief negotiator, was reported to have said the main elements of an exit treaty are ready.

One might say the market's gentle to-and-fro is exactly what you'd expect. Investors are as confused as everybody else about the eventual outcome. And so they cling to the idea, which has been the consensus opinion for about a year, that some form of grand fudge will prevail in the end and that an orderly Brexit will happen next March.