The Brexit gauge is swinging to the positive side once again

Something has been bugging me, and it’s the UK side keeping coy over the new backstop proposal. Here’s some thoughts to chew over

  • The UK is readying another border/backstop proposal
  • They won’t give a timeline for its publication
  • There’s headlines that they won’t publish them at all, which is a very different strategy from the usual ‘blasting news from the roof tops’ approach
  • There’s talk of an EU get together on Friday to talk about Brexit
  • The Oct EU summit is next week, and there was a touted dinner meeting between Brexit negotiators on its eve
  • Now we get the story today about the possibility of a deal on Monday
  • We still have Raab to come today in parliament with an update

It sounds like the UK and EU are dealing under the table again because outside of peripheral speakers like Coveney and the DUP, it’s been very quiet from the negotiators. Once again, I’m getting that feeling that something is cooking because when it goes quiet, that’s when we should be most watchful. This deal story today is the possible icing on the cake. However, Raab to speak in parliament could be a decisive moment. If he lays out the new proposal then we know what’s coming. If he plays coy with it again, my suspicions will be confirmed further. He’s due on when the rest of the session’s business is completed and that’s scheduled for 16.45 GMT. He’s speaking now.

  • UK’s Raab says #Brexit negotiations with the #EU have intensified
  • There are some differences on the withdrawal agreement
  • Is engaging with the EU on new backstop proposal
  • We continue to press our case for future relationships
  • We are expediting preparations for a no deal

So, as per my thoughts above, he’s being very guarded and not giving anything away. That’s softened the quid but it doesn’t change the picture that something is coming.

For trading, as we well know, the gains in GBP could all unravel in an instant but in this case, I see the short side as the higher risk side right now.

I myself am in a small GBPUSD long at 07. Here’s the call from our trading room, just so you know I’m not making it up.

I got out of most of some at 23 and 35 but will be happy to hold (and will try to) the rest through Friday and this apparent meeting. Unless the news changes, or something happens to the USD side, I’ll look to add to longs too.

Ryan Littlestone

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