Taking to Twitter this morning, in a move which echoes that of Trump, the UK PM wrote “We’ve got a great new deal that takes back control — now Parliament should get Brexit done on Saturday so we can move on to other priorities like the cost of living, the NHS, violent crime and our environment”
Jean Claude-Juncker sounded equally optimistic in his latest Twitter post, writing: “Where there is a will, there is a #deal - we have one! It’s a fair and balanced agreement for the EU and the UK and it is testament to our commitment to find solutions. I recommend that #EUCO endorses this deal.”
DUP Against Deal
The deal will now be presented at the EU summit later today with EU leaders widely expected to sign off on the proposals. However, despite the optimistic tone around Brexit negotiations, the DUP party (which form the coalition government with the Conservative party) has said that it cannot support Johnson’s Brexit deal. The DUP has been locked in talks with Johnson and other government officials over recent days ahead of today’s EU summit. Following talks, the DUP released a statement saying that it cannot back Johnson’s deal at this stage.
The statement, signed by DUP leaders Arlene Foster and Nigel Dodds said: “We have been involved in ongoing discussions with the government. As things stand, we could not support what is being suggested on customs and consent issues and there is a lack of clarity on VAT. We will continue to work with the government to try and get a sensible deal that works for Northern Ireland and protects the economic and constitutional integrity of the United Kingdom”.
Without the support of the DUP, Johnson is unlikely to get the deal through parliament, especially considering the opposition he faces outside of government. Leader of the opposition party Jeremy Corbyn released a statement in response to news of the deal, saying:
From what we know, it seems the prime minister has negotiated an even worse deal than Theresa May’s, which was overwhelmingly rejected.
These proposals risk triggering a race to the bottom on rights and protections: putting food safety at risk, cutting environmental standards and workers’ rights, and opening up our NHS to a takeover by US private corporations.
This sell out deal won’t bring the country together and should be rejected. The best way to get Brexit sorted is to give the people the final say in a public vote.
UK Parliament To Vote on Deal Tomorrow
If the EU approves the deal today, Johnson is expected to hold a special Saturday sitting of parliament tomorrow in order to pass the deal by the deadline dictated in the Benn Bill (October 19th). However, if parliament fails to approve the deal, the recently passed legislation requires the PM to request an extension to Article 50, something which he has so far said he will not do.
For now, markets are reacting optimistically with GBP and UK assets rallying, notably UK bank stocks. However, passing the deal through parliament remains the crucial step. If the EU makes it clear that the options are either this deal or no deal (e.g if they refuse to grant a further extension) then the deal could end up being passed as the lesser of two evils. Provided the EU agrees the deal today, attention will now shift to tomorrow’s parliamentary sitting.
Technical & Trade Views
EURGBP ( Bearish, while.87 holds)
From a technical and trading perspective. Price continues to trade lower here as GBP rallies. In line with longer-term VWAP, this move is likely to extend lower. Worth noting, momentum studies flag the risk of a short term correction higher and I will be watching any retracements into the .87 - .8810 level for short opportunities.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!