This morning - bloomberg reporting that the word ‘intensify’ is to be dropped from the EU communique - this would be significant and possibly seen as a towel throw in.
Very likely a call on the 27 nations to prepare for a no deal - this call is merely for public consumption - most states already prepared, e.g. Ireland’s budget this week is based on a no deal premise.
Gbp rose yesterday - as usual the caveat - ‘they take it up…’
That was 14 days back
And that was early this morning - now this evening Gbp is back down just as it did 2 weeks ago.
Anyways - fisheries remains a problem - I posted many months ago that fisheries tied to financials is a possible trade being mentioned - the UK have fisheries that the EU want / EU has the financial market that the UK want - seems now is the time to raise that again - let’s see.
Likely a clearer sign from UK tomorrow and over weekend as to no.10’s thinking - will they walk or talk - hard to tell - if I were a betting man I’d bet on the talking.
UK’s Dominic Raab (de facto 2nd in command) has commented on radio this morning that there’s a deal to be done. The PM will make an announcement later - yesterday evening was his unilateral deadline for a deal - so hard to know yet whether he will stick to that.
One aspect not mentioned - energy - UK has access to the EU energy market - very much larger than fish - a deal on energy is almost complete but seems the EU has held back on completion of that deal which would have allowed the UK some access to that market.
Rumours that energy being tied into the talks rather than being separate.
Bottom line - GBP positive if the talks continue, negative if plug is pulled by PM - watch this space.
Market’s first reaction was on the headline ’ UK business get ready for no deal says UK PM’
But now there’s time to consider - looks like talking will continue - well that’s how the EU are seeing the PM’s statement so Gbp has bounced back.
While there is talking there is a chance of agreement - I’d expect some Gbp buying for the short term at least.
Oh - meant to mention - that word ‘intensify’ has again raised it’s head this evening.
‘European Commission President Ursula von der Leyen said EU negotiators would still travel to London next week to “intensify” talks despite Mr Johnson’s comments.’
That’s speak for ‘ok we see the need to take the talks forward, into the tunnel as in the recent past, no more leaks or posturing - now it’s time for work’.
I’m still betting on a deal - if i were a betting man 
Agreed, there must be some kind of a deal. The PM’s delegation and the EU’s delegation were not sent off to meet endlessly for the purpose of not making a deal. Too much trade depends on it. And both parties want a deal - we want to buy their stuff, they want to buy our stuff. So there will be some kind of fudged compromise deal at the very least and both parties will claim victory.
And the GBP will go up a little bit with the relief that the UK government can no longer screw things up for the markets. And then it will trundle sideways for years and years until we can see the strength of the economy post-Brexit and post-pandemic - maybe about 2024.
Yes Tom - humans have been trading since… - well some argument since when, but likely long before our time.
Your post encapsulates the one thing that many guys lack - forward thinking.
There’s an oldie well known US trader who says that this is a thinking person’s game and he’s right, the more a person thinks the more he/she’ll understand.
Latest is that the talks are over - well sort of over.
The latest spat was surrounding -
The EU dropped the word from the original draft communique and the UK see this as a de-facto snub - the UK have been calling for entry into the tunnel for a couple of months, they accepted the new word as meaning the same thing.
The communique was from the 27 leaders and not from Barnier, he has re-introduced the word in his tweet yesterday - so in it goes.
It does seem that both sides are game playing, the market still expects the talks to continue nonetheless.
And remember that the market is always right.
Cable has risen 230 pips since yesterday’s post - that’s the value of current affairs.
No.10 has just confirmed that face to face talks to re-start tomorrow.
This from the BBC - note the use of the word “intensify”.
“jointly agreed a set of principles for handling this intensified phase of talks”.
Lord Frost said talks would begin again in London on Thursday.
The full statement from No 10 said it was “clear that significant gaps remain between our positions in the most difficult areas” and it was “entirely possible that negotiations will not succeed”.
But, it added: “We are ready, with the EU, to see if it is possible to bridge them in intensive talks.”
Game playing over - now down to some serious work.
The EU have published the joint organizing principles for the negotiations - I’ll not bother with a link since it’s a long read, a quick summary - there are no surprises.
1. The parties have agreed to intensify negotiations. Talks will take place across all
negotiating tables concurrently. Negotiations will take place daily including
weekends, unless both sides agree otherwise.
2. This next and final phase of the negotiations will in principle be on the basis of
each side’s legal texts…
3. Lead negotiators in each of the workstreams should move as quickly as possible
7. It is understood that, regardless of progress in individual workstreams, nothing is
agreed in these negotiations until a final overall agreement is reached.
Energy including all services and goods are now in the mix.
Likely to be less ‘publicity’ except for bland type of statements saying everyone is working hard etc etc so less chance of more game playing - hence Gbp should remain reasonably strong.
Update on talks.
Final days looming as time is now short - any agreement needs to be ‘scrubbed’ by the legal eagles, then translated into 23 official languages, then debated and passed by both parliaments.
(the uk house not so difficult as the PM has a huge majority - eu side could pose some problems as they have already stated they wont ratify if the uk still keeps to breaking the agreement signed last year - their stance ‘how can we agree to a new agreement if the last one has been broken within a year’ )
Vast majority of the tech stuff has been done and dusted including such things vat (sales tax), security, access to databases etc.
It’s now down the the 3 wise men - fishing, level playing field and governance (a speedy means to resolve disputes)
Apparently they are still as far apart as ever and the rule - nothing agreed until all agreed is being applied to current draft text.
Barnier will likely brief all 27 ambassadors on this Friday - might be portrayed as the lead up to a breakthrough in the press.
Anyways the saga is now coming to a close - I see Scottish fishers thinking of re-locating to NI so that they can continue to export their 80% catch to EU without tariffs - easy to re-locate a boat I suppose.
That’s just now hitting the wires via reuters - BP ahead again
Latest position is unchanged - except for the timing aspect.
One of the EU people today has tested positive for covid - likely quite a few, including M. Barnier will self isolate - meantime talks have been suspended.
EU apparently have decided not to pull the plug but to leave it up to the UK to do so, and as time passes the chances of that happening are increasing. Seems the position is that if there is no deal agreed then they’ll leave it at that until next year some time.
Plans are advanced to support nations most affected by no deal in the interim.
Pressure from Nissan to the effect “the business will not be sustainable. That’s what everybody has to understand.” (Nissan Monday past when referring to their car plant in Sunderland, England ) will have little effect on the UK position any more than car makers in Germany will have on the EU.
Bottom line as each day passes by default the chances of no deal increase.
As mentioned earlier Barnier now in isolation so the briefing was conducted by the Secretary General instead.
Reports suggest that over 90% of the possible deal is complete (all the tech stuff re tarrifs/tax/quotas/country of origin etc.
The 3 wise men remain standing - fish/level playing field/governance
Some analysts suggesting a ‘lean deal’ possible and sort out those 3 next year - I’m not so sure that will happen - unless France is persuaded.
Anyways - still talking over the weekend - a race now against time?
Seems time has run out -
"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.
Thank you peterma for your updates, appreciated.
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.