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Nov 12 - 12:55 PM

GBP: Expecting A Trade Deal To Be Finalized Closer To December-1st - Danske

By eFXdata  —  Nov 12 - 11:00 AM

Danske Research discusses its expectations for the UK-EU trade negotiations.

"Negotiations are set to continue next week in Brussels and hope is to finalise a deal that the EU27 leaders can say yes to at a video conference on 19 November. We think that sounds unlikely. We expect a deal (a simple free trade agreement) to be finalised closer to 1 December, so the next two to three weeks are crucial. We assign a 60% probability of a permanent trade deal....

The question is whether President-elect Joe Biden’s victory means anything for the Brexit negotiations. We do not think it is a big game changer but if anything it means more pressure on the UK government to strike a deal," Danske notes.

"We assign a 40% probability of no deal. We will be more concerned about this outcome if there is no progress after 1 December. It seems like the EU summit on 10-11 December is the last available option for the EU leaders to say yes to a deal. The last session in the European Parliament, which also needs to ratify any deal, is 14-17 December. It is also important to remember that even if there is no agreement this year, the EU and the UK can always restart talks whenever they see fit," Danske adds. 

Source:
Danske Research/Market Commentary

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