Brexit: EU negotiators to seek an agreement with the UK – Danske Bank

EU27 ministers yesterday endorsed a mandate for EU negotiators to seek an agreement with the UK for a transition period that would last until the end of 2020, points out Analyst, Mathias Røn Mogensen at Danske Bank.

Key Quotes

“The main hurdle for a deal about a transition period appears to be that the EU requires that EU rules apply fully in Britain during transition while the UK would have no say in EU decision making processes. Any indication that talks over transition could be drawn out will in our view be negative for GBP, and we still see EUR/GBP risks skewed to the upside short term given high non-commercial GBP positioning and current ‘low’ Brexit risk premium. We still expect the range of 0.8650 -0.90 to hold near term.”