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UK-EU border friction - the ‘new norm’

Today’s news headlines:

‘Barnier warns post-Brexit border friction is the new normal’. The EU’s Chief Brexit negotiator has warned that cross-Channel trade will be subject to regulatory friction indefinitely. In a frank interview, Michel Barnier also warned that Britain risks losing its right to tariff and quota-free trade with the EU if it diverges too far from EU regulatory standards. He cited a recent government decision to authorise a previously banned pesticide. Barnier was clear that both sides need to live with the structural changes brought about by the UK leaving the single market, but that ‘glitches, problems, breakdowns’ should be cleared up in the near-term. (Financial Times)

‘Donald Trump is impeached for second time’. For the first time in US history, House Democrats voted to impeach the President for the second time, following Donald Trump’s role in last week’s violent scenes in the US Capitol. Ten Republicans broke ranks with their party by supporting the article of impeachment. It will now go to the Senate where the outgoing President faces another trial, which could prevent him from running for President a second time. Senior Republicans have not ruled out voting to convict Donald Trump but have admitted that no fair trial can take place before Joe Biden’s inauguration on 20th January. (Financial Times)

Today's events, rates, and data 

  • The Bloomberg Dollar Index has traded in a tight range since yesterday afternoon. However, US Treasuries have been subject to further selling pressure after a report that Joe Biden’s administration is likely to propose a further $2tn in fiscal stimulus. Sterling’s trade weighted Index remains in an upward trend but is vulnerable to the effects of new Covid-19 restrictions.

Today's events

ECB Monetary Policy Meeting Accounts: 12.30pm
US Weekly Jobless Claims: 1.30pm
Fed Chair Powell Speaks: 5.30pm

Interbank rates

GBP/USD: 1.3665
GBP/EUR: 1.1250
EUR/USD: 1.2150
USD/CAD: 1.2680