"Frankly, I cannot tell you today if in the end there will be a deal."
Opening statement by EU Comm Pres to EU Parliament this morning.
Being mooted is implementation of the agreed parts - a Trade Agreement Lite so to speak with the hard parts kicked into next year.
This may or may not play - the single market has to be protected at all costs according the the Pres - she further commented - “We want to know what remedies are available if one side deviates in the future. Because trust is good, but law is better,"
This is the breakdown of trust that has permeated these discussions and slowed progress down.
Next move, which the EU has resisted, is for the publishing of their no deal plans including Finance, air travel and so on. Some states are pushing for these to be published put before the E P , when this happens then that is the signal for end of talks although it seems that the EU side will not formally end the discussions - they’ll wait for the UK to do so.
Btw - talk in the market re an urgent meeting called by Barnier with the 8 coastal countries re fisheries tomorrow morning - GBP rose on the talk.
Reality is it is non urgent - meeting via video link is to update those countries on state of play - there is the possibility that Barnier might ‘lean’ on those ministers to give a little - they refused last time he did so (this is just my guess).
So wouldn’t buy GBP on this meeting talk alone - imo of course.
Market has copped on that the meeting this morning is a scheduled one and has sold GBP back below the low of yesterday.
Barnier going to UK this evening (now out of isolation) for continuation of face to face talks - no signs yet whether he got the coastal countries to move a little.
I suspect that governance and LPF are the lesser of 3 obstacles - fish, although small in economic terms is large in politics - now in end game methinks.
Brought it back up some 50 pips only to go lower - back to the beginning of the week.
So would I buy GBP right now?
Thing to remember is that of all the currencies perhaps this one gets moved by the market most. If you are contrarian then good chance you are happiest trading the pound - 'they bring it up to sell it down ’ I have often posted.
Now let’s see if they bring it down to buy it up over the next 2 weeks?
Seems we mightn’t have to wait as long as that. Talks continued over the weekend including Today Sunday.
Apparently there only is one obstacle now remaining - fishing - the smallest in economic terms (01% of UK GDP) but hugely political.
Today the UK Foreign Sec when asked about fishing talked about sovereignty and protecting borders and so on, the suggestion muted by EU of handing back a percentage of fish caught in UK waters was a non runner he commented.
(UK sell 70% of their catch to the EU)
Tomorrow a large UK Retail company will likely go into administration putting 13k jobs at risk - the effect of yet more covid restrictions announced by the UK PM will have yet more consequences economically. Th UK fiscal body the OBR have warned as much, they have also warned that no deal will add a further 250k to the jobless number.
This past week the Gov of BOE warned that a no deal would have longer negative implications for the UK economy that covid
The Irish Govt announced it’s budget for the year ahead - it outlined that the budget is framed around the likelihood of a no deal and that vaccines would not immediately resolve covid - this past week the UK did similar - except that Brexit wasn’t mentioned and there was a premise that all would be well by Easter on the covid front.
This is the backdrop that the negotiators are very well aware - an important week ahead for many people perhaps.
M. Barnier was supposed to update the 27 today but that has been postponed until early Monday morning 0830 eu time.
UK side heading to Brussels Sunday early - maybe even tonight Sat.
This is a last ditch effort but likely will fail - EU side waiting to see if the Internal Market Bill is unchanged Mon afternoon in UK Parliament (wherein the UK will break the last agreement).
Not an easy time for the UK PM - difficult decisions up ahead.
Monday and Tuesday would perhaps be a time to be flat GBP - most businesses have been hedging a no-deal in the past couple of weeks.
Rumours from Brussels are that the ‘offending’ clauses can or will be removed by UK - tomorrow Monday will tell the tale on that one.
On the LPF one issue outstanding surrounds the EU covid fund - is it outside of state aid or not.
Fish is still the biggie - UK proposing 3 year status quo - EU not there on that.
Talks will continue Monday - the market will look to see what happens on the Internal market Bill for clues.
Edit: some heads of state saying 50/50 today and i know i said flat Gbp - but can a trader sit on the fence or take up a position - hmmm… if I were forced I’d say deal
There’s an almost-believable opinion going round that these London-Brussels Frost-Barnier theatrics are just that - its a cosmetic and synthesised dispute so that politicians and voters and businesses back home can be reassured whatever deal emerges is the best deal possible. And it was really hard-won and desperately difficult to negotiate. Then everyone’s relieved and of course the people in charge could not have done a better job and naturally nobody’s to blame…
Yeah I’ve heard that analysis - there are some theatrics but being used for leverage by both sides.
M.Barnier just after giving an update to the 27 - was pretty much negative hence the big move in GBP just now.
When he is updating 27 ambassadors it’s difficult to keep a tight lid on info leaking out - not only 27 ambassadors but all the staffers as well.
Apparently no progress yesterday at all so he’s not hopeful for a breakthrough today.
Edit: ‘not hopeful’ maybe the wrong message about today - there is a push to get something done today whether it be positive or negative we’ll have to wait and see.
Well it turned out to be a little of both. Thus GBP fell and rose - all on the latest coments by players.
Bottom line right now is that M. Barnier has stated Wednesday is last day then he’ll have to report to the EU summit Thursday that it is no deal.
UK have offered to amend the Internal market Bill (the bill that breaks International Law) and to remove the offending clauses - the caveat is that there must be an agreement - this hasn’t exactly placated the EU side, in fact the opposite from comments by M. Barnier re not bowing to threats etc.
So in general nothing much to report - probably back to the 50/50 scenario.
The UK have decided to remove the illegal portion of IMB and have promised to not include similar clauses in the forthcoming Finance Bill.
These clauses were targeting the Irish border - a border that was specifically mentioned must be kept open by the present admin and the incoming admin in the US - impossible to know what caused the change of heart but one obstacle removed to agreement.
An unfortunate side effect has been a breakdown in trust thus ‘governance’ is one of the outstanding issues at present.
UK PM heading to Brussels tomorrow - last time he interjected it had a positive outcome so there is a chance of that happening yet again.
Pretty much gearing for a no deal - they want the EU president to publish the no deal arrangements - she is reluctant right now so as ‘not to scare the horses’.
Apparently there was some input from the US on the Irish border problems - details on that protocol now emerging - there is a sense that the offending clauses were dropped not to facilitate an agreement but to settle ruffled feathers.
Anyways not 50/50 it seems - more 60/40 - let’s see.
Latest is that dinner is over - all news agencies quoting a ‘senior UK govt source’ that significant gaps remain.
He/she also described the discussions as ‘frank’ likely meaning an argument.
Also mention made of yet a new deadline - this coming Sunday.
No comments or leaks yet from the EU side - today they finalized their yet unpublished plans on Finance/Banking, Air Travel, Energy (UK sell into EU energy market).
As previously mentioned when these become published then all concerned will know what has to be done from Jan 01 - meantime we have to wait.
Some companies are having to adjust in the dark - Amazon have emailed EU customers of increased costs and delays if using Amazon .uk, FXCM have emailed EU customers that their accounts will be moved to EU entity in the next week or so.
Yes going to have a nice cozy “dinner” with Ursula von der wossit - I wonder if he’ll get the “Leg-over” ?- that would really p*ss Princess Nut-nut off methinks !
Seems the waiting is finally over - apparently EU side going to publish ‘today or tomorrow’.
For business here in NI it’s much easier since we have had details since the summer and seems to be ‘light touch’ from both sides - we now have two vat registrations, one for internal UK transactions and one for EU - all registration admin done for us by UK and EU.
I suppose it shows that they can work together when they want and for the good of all citizens.
Anyways, the discussions last evening were described as ‘frank’ by UK, EU now describing them as ‘lively’ - so just maybe that will help clear the air.
