Good morning,
Today is the day where Boris Johnson desired Britain to either produce a trade deal “outline” and move ahead with the EU, or “both accept [no deal] and move on”. The date has stuck out in many GBP traders minds, as it has essentially been seen as a forward dated cliff edge, despite the Government repeatedly saying before that it intended to discuss right up until the end of the year. Despite this, the pound rallied across the board yesterday – by as much as 1.55% on the dollar and 1.25% against the euro from the daily lows – as Johnson backed away from the deadline on the advice of his negotiating team.
Essentially, now the deadline is again delayed, sterling’s chances of pushing ahead will likely now revolve around headlines regarding the next date to have an agreed outline. To enter the ‘tunnel’ period, where negotiators on both sides lock themselves away and hammer out details on a deal, significant agreements need to be made on contentious areas – such as fishing rights. Earlier this week, Michel Barnier indicated that nowhere near enough progress had been made to this end, perhaps prompting the about face from Johnson and his team before the EU Council meeting begins today.
Today, at 2pm BST, the talks will begin in Brussels with headlines likely to dominate proceedings, as news breaks on potential breakthroughs and roadblocks.
Have a great day. 
Author: Joshua Haden-Jones, Senior Relationship Manager
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