As several sellside desks have summarized, today will be a binary one for GBP: either deal or no deal. And following an early swoon in cable after speculation rose that a deal would be elusive, the pound soared above 1.35 following a report that EU chief brexit negotiator Barnier told MEPs that a breakthrough is likely today. This was confirmed moments ago by the FT which said that “Britain is heading for a breakthrough on Brexit talks after reaching a compromise with Ireland on the border between the Republic and Northern Ireland, the issue that threatened to derail the negotiations.”
The draft refers to maintaining ‘regulatory alignment’ between Northern Ireland and the Republic after Brexit – a form of words that, according to a senior official involved in the talks, appears to meet Dublin’s deep concerns about a possible hard border on the island and has not raised objections in London. The wording is more comfortable for Britain than previous draft formulations that insisted on ‘no regulatory divergence’.
The BBC confirmed as much after its political editor Laure Kuenssberg said that ‘May and Juncker about to appear together – with a deal seeming to be on the table.”
This post was published at Zero Hedge on Dec 4, 2017.