More Work Needed Ahead of Brexit…

GBP

Monday saw the pound lose some of last week’s strong gains as the EU and UK government confirmed that a lot more work is needed to secure an agreement by the 31st October Brexit deadline.

The big swing in optimism has not been completely eroded, but the market fell as diplomats indicated that the EU wanted more concessions and is not clear that any agreement would win enough support in Parliament on Saturday. The outcome is still far from clear, with the compromises being key to the next stage.

Too many concessions for the EU could see a potential compromise in the integrity of the single market. Too many concessions on the British end could see a deal torpedoed in Parliament. However, the pound’s short term outlook has improved considerably, with the coming week’s events being key to the Brexit endgame.

Key Announcements

09:30 – GBP: ILO Unemployment Rate (3M) (Aug); expected to remain at 3.8%.
09:30 – GBP: Average Earnings Excluding Bonus (3Mo/Yr) (Aug); expected to decrease from 3.8% to 3.7%.
10:00 – EUR: German ZEW Survey- Economic Sentiment (Oct); expected to decrease to -22.5 to -27.3.

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