UK: All eyes are on 10 Downing Street - Rabobank

Bas van Geffen, Quantitative Analyst at Rabobank, explains that in Europe, all eyes are on 10 Downing Street after last night, UK Prime Minister May signed the notice to the European Commission that it intends to withdraw from the EU.

Key Quotes

“This marks the start of a 2-year race against the clock to complete negotiations and to draw up a framework for UKEU relations from 2019 onwards. EC President Donald Tusk has earlier promised that Europe will respond to the UK’s letter within 48 hours – setting out the guidelines for the negotiations.”

“While May’s administration is looking to get the most out of a break-up with mainland Europe, May is also facing another struggle to keep the Kingdom united in the wake of these talks. Scottish parliament backed Ms. Sturgeon’s call for a new independence referendum yesterday. If approved by Westminster, a second referendum would give Scotland some bargaining power in the Brexit talks, and –more importantly– could therefore limit PM May’s.”

“Though this could lower the chances of a hard Brexit –if May wants to keep the UK from breaking up– the currency was mainly driven by the renewed bout of uncertainty that a second Scottish referendum may bring. Cable fell below 1.24.”