The draft Brexit text agreed by UK PM May &...>

CABLE: The draft Brexit text agreed by UK PM May & EU's Juncker Thurs outlined a

close relationship on econ partnership securing no tariffs, fees or charges on

international trade & 'ambitious' customs arrangements that builds on the

'single customs area'. The announcement sent GBP higher in the London morning.

GBP garnered a fresh bid as newswires confirmed that the EU & UK stated their

'determination' to replace the backstop, with the parties committing to 'deep'

customs co-operation. Cable hit a session high of $1.2927, before closing around

$1.2875, where we trade last. The draft still faces opposition from Conservative

Brexiteers, the Labour Party & the DUP, as well as from France & Spain.

- Late Thurs BoE hawk Saunders warned that capacity pressures are building in

the UK economy & rate hikes to return policy to a neutral stance may come faster

than mkts exp (assuming a smooth Brexit). GBP was unmoved as Saunders spoke.

- Focus returns to the Nov 15 low & up trendline support from the Aug lows at

$1.2724/06. Bulls need GBP/USD to hold sustainably above $1.2911 before $1.2977

& the 100/50 DMAs come into play.

- Focus now moves to the EU summit Sunday.