UK and Germany dropped key Brexit demands? – Deutsche Bank

Analysts at Deutsche Bank point out that the big story here in the UK yesterday was a Bloomberg article which hit the screens in the early afternoon suggesting that the UK and Germany had dropped key Brexit demands and were seeking a watered down version of a future agreement for now to push through the process and avoid a no deal. 

Key Quotes

“Indeed the story said that Germany “is ready to accept a less detailed agreement on the UK’s future economic and trade ties with the EU” and the UK side “is also willing to settle for a vaguer statement of intent on the future relationship” including “postponing some decisions until after Brexit day”. The story went as far as to say that an initially planned document of up to 100 pages could now just be a tenth of that.”

“So signs of a classic fudge or at least scope for such with any big decisions pushed back to avoid the risk of a no-deal. As always with these stories there’s a question of source reliability but perhaps there’s also no smoke without fire and the more than 1% rally for Sterling from the lows on the back of it showed that the market took some notice.”

“The Pound was actually a little off its intraday highs (closed +0.39% vs. USD) after Reuters reported a German government spokesman as saying that Germany’s position is unchanged. That didn’t seem like a great surprise though and crucially the comment didn’t explicitly refute the earlier story.”