After a week of Brexit blunders, news that the UK and EU have made ‘sufficient progress’ in their phase one negotiations – crucially including a DUP-pleasing deal to avoid a hard Irish border but with no ‘special status’ for Northern Ireland – sent sterling higher this Friday.
Against the dollar the pound has climbed 0.3%, allowing it to cross $1.35 for the first time since Monday; against the euro, meanwhile, sterling has had more success, jumping half a percent to tease a 6 month peak of €1.15. Though inarguably pretty damn healthy, this early growth does suggest a level of reticence from investors, who appear to be taking on board Donald Tusk’s warning that the real hard part – i.e. the forging of a new relationship between the UK and EU – is still to come.
Predictably the FTSE got little out of all this, with the UK index wilting in the face of the pound’s push. It is perhaps a sign of the swell of positivity, however, that the FTSE managed to avoid tipping into the red; instead the index opened effectively flat at 7320, at the lower end of its recent trading. As for the Eurozone indices, they were just pleased that the euro is on the back foot – the currency paired its losses against the pound with a 0.2% dip against the dollar – allowing the CAC to rise 0.6% and the DAX 0.8%.
If anyone is interested in some other news, Friday brings with it the UK manufacturing and industrial production figures – both are expected to see a sharp drop, to 0.1% and 0.0% respectively – and, later, the US non-farm jobs report. Yet it might be hard for anything to disrupt the Brexity-trading beyond further details of the divorce deal itself.
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