Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
- Media reports suggest Brexit deal is imminent, with announcement possible in coming hours
- Final hurdles include details on fisheries and quotas
- £668bln deal allows UK zero-tariff, zero-quota access to EU markets – at a price
Figure 1: Sharp rebound in GBP risk reversals shows market welcoming news of an imminent deal
Source: MNI/Bloomberg
Numerous UK media outlets now see a Brexit deal being secured in the coming hours, finally ending a saga of re-negotiation that began after Boris Johnson secured a strong Conservative majority in 2019's December General Election.
Markets have taken the news of a likely deal in their stride, helping GBP/USD re-challenge the 2020 highs printed mid-December at $1.3624. Trend conditions are bullish and a break of this hurdle would reinforce the positive trend structure. This would open 1.3677 initially, 76.4% retracement of the 2017 - 2020 downtrend. This sentiment is similarly evident in options markets, with implied vols sharply dropping for contracts that capture the end of the transition period on Dec 31.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.