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Brexit: Closer to a deal, but not an exit

HYCM

By Giles Coghlan, Chief Currency Analyst at HYCM

Brexit path still remains unclear

From Thursday last week and the announcement of a potential Brexit way forward the betting market odds of a 'no-deal Brexit' have dropped from ~17% to ~13%.

A 2019 Brexit however is only ~33% priced in ,up from ~32% on Thursday last week.

This tells us that the market expectations are for another delay to Brexit as the most likely outcome from here. This makes sense when you consider the outstanding issues still remaining, which include the following issues:

- Brief by EU Brexit negotiator to the EU 27 explains the rebate system is complex and plans will not be ready for the end of the transition period and it is still unclear how they can ensure goods for N.Ireland remain in N.Ireland.

- DUP stated that anything which traps the NI in the EU, whether single market of the customs union, will not have the DUP's support

- DUP's deputy leader Dodds who rejected the proposed ' double customs' Brexit solution in which he said that. 'N.Ireland must stay in a full UK customs union, full stop'.

- An agreement this week is seen as unlikely with the meeting more likely to focus on an extension to 31 January 2020 or later.

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HYCM

Source: https://www.forexlive.com/news/!/brexit-closer-to-a-deal-but-not-an-exit-20191015
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