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In an article written in the UK Telegraph, it notes that EU member states are hardening their demands for ‘status quo’ access to UK fishing grounds after Brexit as fears grow that fundamental differences on the shape of the future EU-UK relationship could now crash the talks within months.

A new draft of the EU’s negotiation mandate presented to EU ambassadors over the weekend shows major EU fishing states looking to further tie the hands of the EU’s chief negotiator Michel Barnier to retain their existing fishing quotas.

The new text says that Mr Barnier must “uphold” existing reciprocal access to fishing grounds, following complaints from France, Belgium, Ireland and the Netherlands that the previous pledge merely to “build upon” existing access was far too weak….

Key notes

  • EU sources said that the demands on fishing could stiffen even further over the weekend, as fishing states fear that Mr Barnier will make a compromise with Britain that will see their boats able to catch significantly less fish.
  • Boris Johnson is insisting British fishing grounds are “first and foremost” for UK boats but skirting around any hard guarantees.
  • The Telegraph understands that a meeting of UK and EU officials in London on Friday exposed a yawning divide between the two sides over the basis of the future relationship agreement.
  • The EU is insisting that the entire future relationship agreement – including trade, security and other agreements like fishing rights – should be “embedded in an overall governance framework” that covers “all areas” of cooperation.
  • However the British side is understood to have been adamant that it wants only a set of separate, basic agreements – from trade to security, fish to financial services – with each one having its own separate governance mechanism and no cross-cutting punishments.
  • Internal discussions on the European side are clear that even if unilateral EU assessments on data-sharing and financial services are completed by the summer, a decision will not come until much later in the year, once the EU has seen how rest of the negotiation is progressing.
  • The gulf between the two sides has now left officials in both London and Brussels fearing that talks could break down as early as this April, the Telegraph understands.

GBP/USD implications

The pound is already suffering and could extend further on such sentiment for the week ahead. Gross Domestic Product and USConsumr Price Index, as well as Retail Sales, will be key data for the pair. Federal Reserve Jerome Powell is also testifying this week – indeed, it shall be a busy week for cable. 

GBP/USD broke below a key 38.2% Fibonacci on Friday, with eyes on the 200-day moving average: Chart Of The Week: GBP/USD eyes 50% mean reversion – 1.2730s