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Analysts at Rabobank point out that the headlines continue to feed the increasingly feverish ‘will they, won’t they’ debate over the chances of a Brexit trade deal.

Key Quotes

“Today the UK cabinet will reportedly be hunkering down in an effort to trash out a compromise agreement this month. Even though hope for a special summit of the EU leaders on November 17 for the specific purpose of signing an agreement look increasingly distance, the FT is this morning reporting that Irish Taoiseach Varadkar has offered a compromise on the issue of the Northern Ireland border.”

“While Varadkar has maintained that the UK will not be able to unilaterally end the EU backstop plan, through which the Northern Ireland would remain in customs union until an alternative proposal to prevent a hard border across the island of Ireland in agreed, he has indicated an openness to consider a review mechanism.”

“The pound is set remain driven by Brexit related headlines. On balance optimism regarding a deal has increased in recent sessions, with EUR/GBP currently holding just above its October low.”