Initially Britain has stated that it would drop the EU single market and customs union after Brexit, however this decision of Prime Minister Theresa May has been challenged by the House of Lords last week, and the lower chamber is expected to hold a follow-up vote in May, according to Reuters. Officials in Brussels have cited little progress in Brexit negotiations since the last meeting of the EU leaders last month, where Brussels and London have showed up to now conflicting standpoints on their new deal after Brexit. Namely, the customs union would change the dynamic between Britain and the EU and would clearly show that the UK does not want to stay close to Europe, and if they decide to exit the single market, EU could be quite responsive, as a senior EU diplomat in Brussels stated.
According to the EU Brexit negotiation, Michael Barnier, European Union is quite flexible and open for business, however it is up to the United Kingdom to have their vision for the future, confirming UK’s red lines and adapting them. As a response, Theresa May’s spokesman stated that the Prime Minister is absolutely clear about leaving the customs union and will be free to negotiate their own trade deals around the world.
For now the negotiating round on May 2nd to 4th is not expected to bring a breakthrough and it is up to the UK to make clear its next move. More drama can be expected before the next EU summit in June 2018, according to the EU diplomats.
As opposed to a very quiet trading day yesterday, today we are expecting more macroeconomic news releases from the EU and the US. Starting with the German Gfk consumer confidence, which is expected to be unchanged from the previous month and the UK’s CBI distributive sales survey for April that is expected to post an improvement of -3 reading after -8 in the prior month, followed by the ECB Press conference and EU minimum bid rate. Later traders will be looking at the US durable goods orders and unemployment claims.
ECONOMIC CALENDAR EVENTS FOR APRIL 26th
EUR German GfK Consumer Climate
EUR Spanish Unemployment Rate
GBP CBI Realized Sales
EUR Minimum Bid Rate
EUR ECB Press Conference
USD Core Durable Goods Orders m/m
USD Durable Goods Orders m/m
USD Unemployment Claims
