As the self-imposed soft deadline of Thursday 15th for a Brexit deal approaches, Boris Johnson and his team of negotiators will certainly be skeptical that such a task can be wrapped up in the small amount of time left. This week will almost certainly be a bumpy one for the pound as it’s pushed and pulled by the no doubt copious amount of headlines that will be released.
While there are still small pockets of optimism that the bare bones of a deal could be outlined within this week, the reality is that more time is required to hash out the remaining obstacles. The EU last week confirmed that they will call PM Johnson’s bluff over the soft deadline and many Brussels insiders believe negotiations could run into mid-November.
The soft deadline created by Boris Johnson was devised to be aligned with the EU summit which will take place across the 15th/16th. Such summits were generally not too pleasant for Johnson’s predecessor. On more than one occasion Theresa May had to return to the UK humiliated by developments not going her way.
Over in the US, the presidential campaign will get back into full-swing as Donald Trump continues his recovery from Covid. Also on the agenda this week will be the ongoing talks between Republicans and Democrats regarding a second stimulus package. The pressure is on to have anything finalised before the election takes place.
On the economic data front, a fresh UK employment report is due for release tomorrow. Also featuring this week will be US inflation and retail sales.
Have a good week.
10:11am, October 12th 2020
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