Morgan Stanley joins the market bulls expecting a soft Brexit in its latest forecasts for a trade deal ahead of the autumn talks between the European Union (EU) and the UK.
The bank cites the reduction of 10% from the previous 40% expectations of a World Trade Organization (WTO) terms based departure of the ex-neighbors.
The resultant 70% soft Brexit probabilities also take clues from an increase in the mixed deal favors to 60%, from the previous 50%.
It should, however, be noted that the bank anticipates no change in the 10% probabilities that favor the UK will have a double deal with the EU. This puts out of the single market with an agreement on enhanced equivalence in financial services provided in exchange for EU access to UK fishing waters and close alignment on trade in goods.
GBP/USD remains bid…
Ever since the EU and the UK agreed to give a final push to the Brexit talks, GBP/USD has been on the bids. The Cable currently probes a 12-day high amid the market optimism.
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