UK: Focus on the EU response to the Brexit white paper – TDS

Analysts at TD Securities suggest that investors will be focusing on the EU response to the Brexit white paper.

Key Quotes

“With cable looking comfortable in a new trading range below 1.3050, we see additional upside risks to EURGBP if the EU’s tone turns increasingly dismissive or combative toward the UK. This would leave resistance at 0.8968 vulnerable despite expectations for an August BoE rate hike.”

“The EU General Affairs Council meets to assess the UK’s Brexit white paper. Barnier will discuss his conclusion of the Brexit white paper with the 27 EU ministers and make recommendations to the council, and will give a press conference to summarise their conclusions.”

“Importantly, while he’s likely to address the UK’s Chequers agreement, the document is largely focused on the future trading arrangement, which is not a priority to the EU right now (the two sides have until late-2020 to negotiate this). Barnier’s focus is therefore likely to be on any implications of the Chequers agreement for the Irish border, as that is most relevant for the withdrawal and transition agreements that must be signed this year. For data, government finances are out for the month of June.”