The chief EU Brexit negotiator Michel Barnier announced that a Brexit deal is still very much possible, dispelling some of investors’ fears regarding a hard Brexit at the end of the month. Barnier’s team is working hard with the United Kingdom at the moment, as the two sides are trying to secure legal assurances about problematic issues such as the Irish border.
The leaders of European Union member states are gathering this Thursday and Friday to discuss Brexit, among other issues. Boris Johnson must present a deal by October 19, on which the UK Parliament will need to vote. If there is no deal, or if the deal does not meet Parliament’s approval, Johnson must ask for a delay to Brexit.
The British pound was able to strengthen against the dollar and the euro on the news that the talks are going well. It even helped the EUR rally against the USD.
The markets have also been responding well to China’s confirmation of a preliminary trade agreement with the United States. Risk appetite is on the rise as a result.
Meanwhile, Donald Trump finally took action against Turkey’s invasion of Syria. The US President cancelled trade negotiations with Turkey and imposed tariffs on its steel in an attempt to discourage President Erdogan from fighting the Kurds along the border. So far, this has not had an effect on Turkey.
