Barnier takes hard-line position on financial services in UK
Michel Barnier, the EU’s Chief Negotiator, set out a hard-line negotiating position in an exclusive interview with the Guardian newspaper that was released late Monday evening. In the interview, he ruled out the possibility of a special carve-out for the UK financial services industry and warned that Britain will have to abide by any new rules drawn up by the EU during a transition period after leaving the bloc. This came just after Theresa May attempted to try and unite her cabinet behind a Brexit policy direction. May gave a statement to parliament where she wanted to give certainty that it would be a smooth process, and that a bespoke deal would be possible, but this was quashed by Barnier’s statements in his interview. Another full cabinet discussion on what is being called the ‘end state’ of Brexit talks is due today.
All eyes on US tax bill
Global stock markets hit record highs on Monday on expectations that a U.S. tax bill could soon pass, but the USD remained softer through the day as currency markets were more sceptical about its ability to get voted through. This will likely be the main focus for the rest of the week, as the economic calendar is quiet stateside. The Senate could vote as early as today, with Trump aiming to sign the bill by the end of the week if all goes to plan. Two further Senate Republicans that had being holding out on agreement changed their minds yesterday, adding to confidence levels that it will pass.
German IFO expected to stay at record-high levels
The only release of note in the economic calendar today is the German Ifo Business Climate Index out at 9am. Markets are expecting a reading of 117.60 this month, seeking further validation of the robustness of the Eurozone’s growth story. The index surged to an all-time high in November of 117.50. Additionally ,the current assessment index is expected to climb to 124.8, up slightly on last month.
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