Credit Agricole on cable
Mainly on the back of UK PM Theresa May not driving ‘hard Brexit’ fears even higher.
While confirming that they will exit the EU as planned, it was also stressed that a disruptive Brexit cliff-edge shall be avoided and that the final deal will be voted on in parliament. Looking ahead, we believe there is limited position squaring related upside risk from the current levels. First of all speculative positioning is now more balanced compared to the previous few months and, second, real money is unlikely to return unless long term growth expectations improve more markedly. Considering that the EU has refrained from entering into more detailed negotiations ahead of triggering Article 50 overall uncertainty should continue. Rating agency Fitch explained, in reaction to PM May’s press conference, that the range of possible Brexit outcomes remains wide and the timescale for reaching an agreement is unclear.
