Boris talks tough on Brexit trade deal, Pound tumbles

Hi everyone,

The Pound starts the first working day of the month and post-Brexit deep in the red, after speeches from both Prime Minister Boris Johnson and chief Brexit negotiator Michel Barnier earlier today. 1%+ has been lost across the board, effectively seeing Sterling's gains from last week wiped out.

"We have made our choice; we want a free trade agreement, similar to Canada's" was the main message to take from the PM's speech. This style of agreement allows 98% of all duties abolished and opens up free trade to financial services, transport and telecoms for both Canada and the EU.

Johnson goes on to say if a Canada-style agreement cannot be struck, he will seek an Australia-style agreement. This will involve more barriers to trade as the UK would not follow EU regulations and standards. This outcome would be less Pound-positive compared to the Canada-style agreement. 

The talks will keep £ on a knife-edge until negotiations are over and this will leave the market with palpitations throughout the year, particularly the second half. The Pound will perform negatively each time there is talk of tariffs or any sign that there has been a breakdown in the negotiations. 




Upcoming Data


Tuesday, 4th February, 2020

09:30 UK - Construction PMI
10:00 EU - Euro-Zone PPI
15:00 US - Durable goods & factory orders

Wednesday, 5th February, 2020

09:00 EU - Euro-Zone PMI
10:00 EU - Euro-Zone retail sales
12:00 US - Mortgage applications
12:15 US - ECB President Lagarde conference
13:15 US - Employment change & trade balance
15:00 US - Non-Manufacturing/services composite

Thursday, 6th February, 2020

07:00 EU - German factory orders
08:00 EU - ECB President Lagarde conference 
08:30 EU - German construction PMI
09:00 EU - ECB publishes economic bulletin
13:30 US - Jobless claims

Friday, 7th February, 2020

00:00 EU - Italian sovereign debt rating
07:00 EU - German industrial production & trade balance
13:30 US - Non-farm payrolls, unemployment rate & average earnings
16:00 US - FED releases semi-annual monetary policy report
20:00 US - Consumer credit


Dan Waterman
Office Manager



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