News wires from the weekend and the early part of the week have put a different spin on Brexit.
This time around, the focus is more on the financial and economic impact of Brexit on EU member states.
With the spin doctors working hard to change the narrative, Macron faces hostility at home.
News from the weekend delivered a blow to French President Macron and his political ambitions.
Standing firm against Britain and EU member states, it was French fishermen that looked to force Macron to compromise.
While the news was of little surprise, it was somewhat late in coming. For French fishermen, a no-deal Brexit would result in no access to UK fisheries. Any deal would therefore be better than no deal.
This may be bad news for Macron, but it was also bad news for British fishermen. The French vowed to block British fish from reaching French shores. Supply and demand, however, suggests that British fishermen would have a jump in demand should EU access to UK waters come to an end.
What about trade?
Time is rapidly running out for Britain and the EU to reach an agreement.
As yet, there is no hint of either side showing a willingness to compromise in the interest of a Brexit deal.
With November and Britain’s December departure date rapidly approaching, the markets continue to expect an 11th-hour agreement.
Talks between Frost and Barnier are to continue in London until tomorrow, before moving to Brussels.
One thing is certain for France, Germany, and other EU member states. The economic fallout will not only hit Britain but the EU.
For Macron, it won’t just be access to UK waters that will test political support in the months ahead should no agreement be reached.
With COVID-19 curtailing an economic recovery, a Brexit deal will be all the more important.
In spite of this, there has been little discussion on trade or on the other key obstacles, including UK fisheries, across the media.
At the time of writing, the Pound was up by 0.09% to $1.30350.
The recovery to $1.30 levels has largely stemmed from hope rather than any real progress towards a Brexit deal. Following Johnson’s call to end talks, the fact that both sides are negotiating is a plus.
In recent weeks, there has been some chatter of both sides wanting to hold out until after the U.S Presidential Election. It would be quite a gamble, however for either side.
While the polls show that Biden is out ahead, Trump has been the underdog before and could still return to the Oval Office.
For Boris Johnson, a no-deal Brexit would be more palatable with Trump in the White House. For the EU, a Biden victory would likely lead to a pro-EU environment, with the Democrats wanting to undo Trump’s handy work.
When considering the fact that Trump may contest any outcome to the election, there may also be a period of political uncertainty in the U.S through November, however. For this reason, reaching a deal in the coming weeks and before the end of November is considered a must.
The Pound may not have seen as much volatility as many had expected in recent weeks. A lack of progress towards an agreement by the end of this week, however, could materially impact sentiment.
One final curveball for Johnson and the Brexiteers could be the House of Lords vote on the Internal Market Bill next month.
So, while the Pound has found its comfort zone, there remains plenty of downside risks…
This article was originally posted on FX Empire