(13 OCTOBER 2017)DAILY MARKET BRIEF 2:Brexit negotiations: Tensions are coming back

Brexit Negotiations are back into centre stage. The EU 27 Leaders are meeting today in Brussels to discuss about the further trade agreement with the UK. This promises to be intense as 27 Countries that must agree seems like a very difficult task. It is obvious that each one of the EU members does not have the same interest and the same relationship with the UK which will are making the overall EU position on trade relations very fragile.

We do not believe that the “No deal” will be the final conclusion of the Brexit negotiations. We rather believe that the lack of unity within the European Union will benefit to the UK. The EU are definitely trying to play tough by blocking trade talks by asking the UK to first secure three main points: a guaranteed citizens right for EU citizens, a cash settlement of around 10 billion pounds and the Northern Ireland Border.

The “No deal” issue which we consider a lose-lose scenario is however not likely according to us. In our view, EU economic difficulties (massive debt, Greek issues, immigration) will definitely help UK achieving an agreement. Catchphrases from both sides are definitely driving tensions higher.

By Yann Quelenn