Analysts at ANZ explained that Brexit was the focus overnight, with the EU saying they are ready to offer the UK an unprecedented relationship.
Key Quotes:
“GBP rallied 1% as the perceived likelihood of an amicable divorce rose, lifting the odds of a more hawkish rate path for the BoE. UK yields rose 3-5bps across the curve and FTSE fell 0.7%. However, tangible progress on Brexit still needs to be made (see below).
Elsewhere, equities were biased higher and Treasury yields were little changed. The USD was mixed. AUD held onto losses and CAD was unchanged despite positive NAFTA developments. Argentina asked the IMF to speed up the loan process, which saw its currency fall 8% today. Emerging market assets were under pressure, with the TRY down nearly 3%. Oil rose 1.5% on a US inventory drawdown.”
“Michel Barnier, the EU’s chief Brexit negotiator, said the bloc is ready to offer the UK an unprecedented relationship “such as there never has been with any other third country”. He said the deal may include an “ambitious free trade agreement”, but noted that Britain must respect the single market in return. The EU has expressed this sentiment before and the comments overnight do not represent a fundamental change in stance, with tangible progress remaining elusive. Nonetheless, with markets wary that no-deal has become an all-too-real possibility, the GBP rallied. Negotiations will resume on Friday.”
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