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Nordea Markets analysts note that the GBP has rallied even though the market still holds an exit by 1st of November as the base case(>50% probability in prediction markets), and most of the rally was fuelled by Merkels comments in Hague that a solution can be found before 1st of November.

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It seems as if Merkels comments refuelled the optimism around a possible alternative arrangement to the back-stop  before 1st of November. We find those comments terribly over interpreted and give such a scenario roughly the same probability as the odds of Trump buying Greenland before that same date. Zero!”

“After all it has been the (almost) sole discussion point in negotiations in more than a year, and no one (not even BoJo) has been able to present an alternative solution. Either they will leave without a deal (which most likely requires a general election first) or else we get another postponement,  with the latter being the most likely scenario.”