Sterling under pressure
Cable dipped through 1.3300 to the lowest since Nov 27 as Brexit jitters amp up. Technically it's a minor setback with plenty of support down to 1.3280.
The headlines today suggest some frustration is setting in. Leaks have been light for a few days but they've started up today and they highlight that all the main rifts are still there. Tomorrow is a big day with an update from Frost coming. My baseline is that everything in Europe leaks and if we were close to a deal, we'd be hearing something now. The talk at the start of the week was that the EU would trigger no-deal contingencies if we didn't have a deal by tomorrow. That doesn't mean talks will stop but it's a real sign that they're genuinely stuck.
The chart of EUR/GBP is the more-interesting one for me. The pair has catapulted from support at 0.8865 and is up 80 pips today.
I think the market still (rightfully) prices an 80% probability of a deal but we're going to find out who has the stomach for the final stretch of negotiations, which are always the hardest.
