A reported released this morning has suggested that the European Parliament is currently putting together a proposition that could outline an “association agreement”, which would give the UK a special deal with the EU. The United Kingdom would essentially have privileged access to the single market as opposed to the potential tax being talked about.
This report is a long way from Chief Negotiator for the EU Michel Barnier who has been particularly firm with the UK suggesting they cannot cherry pick certain parts of the EU laws and ignore others. This stance has now been completely contradicted and should this be adopted as policy moving forwards we could see a major change of tune from several EU leaders.
Sterling made close to a full cent gain against the Euro following the news as any positive UK news is considerably well received. Businesses are still waiting for any clear information on how the Brexit will look with what trade rules will be in place. Investors whenever there is positive news pump money into Sterling and over the next year that could continue to be the case.
Eurozone Data this week
Friday of this week will see the latest Consumer Price Index (CPI) data released for the Eurozone which can always cause market volatility. EU inflation has been of concern for the bloc in the last few months as until there is an up lift there isn’t going to be any changes in the interest rate. The Eurozone could start to be left behind other central banks as the US, Canada and the UK look to raise rates in the near future. Mario Draghi who is the President of the Central Bank in Europe is set to speak before the end of February and he could provide some clarity on the EU’s position.