May Remains Optimistic
Following late night talks between UK and EU Brexit negotiators, which concluded at 2:45 am on Monday, the PM’s deputy has said that “we are almost within touching distance” of a deal being done. The PM herself said that negotiations are now in the “endgame” stage though did admit that talks had been “immensely difficult”.
Cabinet had been expecting the PM to present a new Brexit plan to them this week. However, they have been advised instead that May will simply update them on the progress of negotiations. Regarding the state of negotiations, it seems that the key issue which continues to present a great obstacle is that of the Irish border.
November Summit In Jeopardy
Both the UK and the EU are looking to schedule a November summit at which they can confirm and sign off on the terms of a withdrawal deal. However, unless May is able to successfully pass an amended Brexit plan through parliament in the next week, it looks incredibly unlikely that such a summit will be able to take place.
Furthermore, the EU is adamant that it will not go ahead and schedule a summit until it knows that an agreement can be reached regarding the Irish border issue. If a November summit is not organized, the next scheduled EU summit is to be held on 13/14 December which makes it extremely difficult for May to then get a “meaningful final vote” from MP’s ahead of Christmas.
On the EU side, the failure of the talks was reported in a less optimistic way, with a statement released to the press saying “Barnier explained that intense negotiating efforts continue, but an agreement has not been reached”.
After breaking down through the rising trend line from 2017 lows, EURGBP is now sitting just above support at the year to date low of .8625. The failure at .91 suggests a potential head and shoulders pattern which could gather pace to the downside once the 2018 low has been broken. Below here, the next key level to watch is the .8314 level where we have a raft of previous swing lows.