Huge week for Brexit
|In Europe talks between the UK and EU have hit a lull following positive developments as Irish PM indicated a deal could be made. Last week, Leo Varadkar and Boris Johnson engaged in last-ditch negotiations have raised expectations of a possible Brexit deal. The details of the deal are vague but rumors indicated that Johnson has made compromised on the issues of customs in Norther Ireland but would have the veto right over any changes. The simplest deal form, Northern Ireland would stay in the EU customs union. This represents a substantial shift by the Irish government that has so far been relatively negative about the outlook of discussion continuing. With the “clock on the field”, Brexit talks have taken a manic feel increasing the likelihood of a tail-like event. Cable surge to 1.2703 (200d MA) has marginally corrected as talks have stalled over the weekend. With talks in Brussels and Queens Speech, news flow will be “coming in hot”. The Queen's speech will outline the government’s plans for legislation including details for the withdrawal agreement bill will be voted; on should, the EU agree to a Brexit deal this week. By Thursday, the market should have a better view of what will happen but currently, viability is very low. Market continues to price in the least disruptive outcome. We don’t believe the outcome is already on the field, therefore we would keep GBP trading light.
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