Brexit Battle with Barnier

A promising start?

David Davis has begun Brexit negotiations with the EU as both sides met face to face for the first time yesterday and exchanged hiking gifts in an attempt to break the ice. Davis entered with a ‘positive and constructive’ frame of mind to build a ‘strong and special partnership’ with the remaining EU members. 

The initial exchanges will continue to focus on setting out how talks will proceed in future as they look to put in an orderly process for negotiations. The early view from the joint press conference yesterday afternoon sounded as expected with Davis saying talks got off to a ‘promising start’ and Barnier re-iterating initial points about there being ‘substantial consequences’ from Brexit as they stick to the EU Agenda of negotiating the Departure Bill before any trade deals. 

There was very limited reaction in the currency markets as a result, but there are various comments in the papers- most notably from Tim Farron the former Lib Dem Leader who claims Davis has capitulated on day one!

Separation Anxiety

Sterling has been in its tightest monthly range versus the Euro since 2014 so far, although many predict this may change as talks begin with a lot of emphasis being placed on the tone of discussions. 

Initial talks will focus on the contentious issue of The Brexit Bill and other separation issues as largely expected and without any ‘concessions’ as a result, a number of analysts are primed to react to the first signs of a negative outcome or breakdown in communication from these talks. 

Elsewhere

The Australian Dollar held its ground relatively well on the back of a credit downgrading from Moody’s to Aa3 from Aa2 as the agency focuses on concerns over the Australian housing market.

There is a lack of significant data out today, but we do have speakers from Central Banks including: The Bank of England, The UK Chancellor, The FOMC and the Swiss National Bank as well as ongoing Brexit and Conservative/ DUP Talks to contend with.

Bonne journée!