CIBC Research expects shallow GBP rallies after a potential Brexit trade deal.
"As the clock ticks down, the question remains: Is there sufficient time left to conclude a deal? We still expect a deal to be reached, but we will need to see a degree of statecraft (political concessions) in order to clear the remaining negotiating redlines," CIBC notes.
"Our central case scenario remains a deal being brokered before month end, notably ahead of the final scheduled EU Parliament session of the year, from December 14-17. However, a deal is not the end of the process. Rapid ratification, within necessary protocols, risks becoming a concern.
Post-Brexit headwinds, as the ease of doing business is undermined by costly and time consuming customs checks, allied to the perpetuation of low productivity and weak business investment, suggests that any post-deal GBP rallies will prove short-lived," CIBC adds.