Analysts at Deutsche Bank suggest that the focal point of the week for the markets will be the EU Council summit, taking place on Thursday and Friday.
- “Amidst the negotiations with the EU, the UK government will also be outlining its legislative programme for the coming session of Parliament in a Queen’s Speech today. Surreal timing given all that’s going on but it will effectively be an election manifesto. This all comes before a planned special sitting of Parliament, which is also the deadline set under the Benn Act, which says if MPs either haven’t approved a deal by that date, or explicitly approved leaving the EU without a deal, then the Prime Minister has to ask for a three-month extension to the Article 50 deadline, currently set for 31 October. So a bumpy path to a binary moment on Saturday.
- Our FX strategist became bullish on Sterling on Friday morning and target $1.35. They are slightly less concerned as to whether the deal passes as they think the latest developments mean that as a minimum the Tories should now campaign on their deal if they get voted down in Parliament. So they believe the next election will be based around a deal (if one hasn't been reached) or a second referendum and that no deal risks have fallen.”