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Original title: Decision analysis: A critical moment! Is there a deal or no deal on Brexit? Johnson went to a banquet today, investors expected
FX168 Financial News (London) News December 9 from 15:00 to 22:30 Wednesday (December 9) European market afternoon,Dollar indexAfter the decline in the Asian market, it fluctuated in a narrow range around 90.80; spot gold hovered around the $ 1,860 mark.
During the European period, the market is primarily concerned about the progress of the Brexit negotiations. With the EU summit to be held tomorrow and the theoretical deadline for Brexit negotiations reached, the UK and the EU continue to discuss important differences. British Prime Minister Johnson will go to Brussels on Wednesday afternoon local time to dine with the President of the European Commission, Von der Lein, to discuss the main trade deals.
British Prime Minister Johnson recently stated that he hopes to discuss Brexit with the European Union; there is still a good agreement to complete; From January 1 of next year, “we will be a great success. Regardless of whether there is a Brexit trade agreement, we will prosper.”
Regarding divergent issues, he emphasized that the EU wants to take control of our fishing waters. The EU insists that if they pass new bills in the future, they want to punish our automatic rights. “No prime minister will accept this type of agreement.” The UK is ready for an Australian or Canadian-style solution.
EU Financial Services Commissioner MCGUINNESS said: “After listening to British Prime Minister Johnson’s speech in Parliament, he has no confidence in the Brexit trade negotiations.” He said the European Commission will prepare today to focus on Britain’s no-deal emergency plan for Brexit.
But before that, Irish Deputy Prime Minister Leo Varadkar (Leo Varadkar) said that it was possible to reach an agreement and told RTE Radio that in the end a little politics is needed, and the two sides need a little action in the end. . “But I think it is possible.”
Varadkar also suggested that the UK needs to make concessions on the field rules of fair competition, labor and environmental standards.
“Is (British Prime Minister) Boris Johnson willing to make concessions in these areas? I think he could … Compared to the more conservative Brexitists, I think his nature is closer to the freedom he has demonstrated.” Mayor of London “.
From a market performance perspective, investors expect the two sides to reach an agreement at the last minute. After the impact of the first two days,GBPThe / dollar rose significantly during European time, with an increase of almost 100 points, reaching a high of 1.3477.
Jean François Robin, Natixis head of global research, said: “Many clients are not prepared for a no-deal Brexit.” “Everyone thinks they will reach an agreement late at night.”
But some analysts warned that the current mood is too optimistic. Paul O’Connor, head of multiple assets, Janus Henderson, said that most people hope to reach a Brexit deal a few weeks ago, but in recent days, people’s opinions have become “somewhat mixed.”
He said the pound is the “best individual barometer” of investor sentiment, but noted that the pound has been “fluctuating” in recent weeks, showing that traders lack strong faith. He added that regardless of whether a deal is reached, “the UK will face the rather difficult economic shock of Brexit.”
The Netherlands International Group noted: “Today Johnson and von der Laing will have dinner in Brussels to try to revive hope for a trade deal between Britain and Europe. Latest comments from officials on both sides have highlighted long-standing differences in some key points. However, the UK government’s decision yesterday to withdraw provisions that violated the Internal Market Act was seen as a positive development. It is difficult to assess whether the recent low-key comments are part of the negotiating strategy or really show the widening gap between the two sides. Obviously there is almost no time left for a deeper dialogue, and the market may need positive news from Brussels today to remain optimistic about the prospects for a deal. If the prospect of a deal becomes more realistic, the pound will continue to face huge downside risks. “
Analysis of the main currencies:
EUR: At the start of the European market on Wednesday, the EUR / USD pair opened at 1.2129. The European session fell, with a low of 1.2101. Initial short-term support for the exchange rate is at 1.2086 and initial resistance can be seen at 1.2124.
British Pound: At the start of the European market on Wednesday, GBP / USD opened at 1.3379. The European period continued to climb to a high of 1.3477, an intraday increase of more than 0.8%. Initial short-term support for the exchange rate is at 1.3294 and initial resistance can be seen at 1.3504.
Yen: The US dollar / yen opened at 104.17 in early trading in European markets on Wednesday. It fluctuates within a narrow range during European time and is currently near 104.14. Initial short-term support for the exchange rate is at 104.00 and initial resistance can be seen at 104.25.
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