Brexit speech tomorrow is a key risk event - Nomura

Analysts at Nomura explained that in terms of catalysts for the next move in GBP, tomorrow’s Brexit speech is a key event risk.

Key Quotes:

"It could confirm whether the UK is seeking a two-year transitional deal or not and if that deal would include single market access during that time. 

If the outcome is a risk event (of a possible “cliff edge” Brexit) that is delayed a further two to three years by this transitional arrangement, it will be kicking the can of Brexit further down the road. 

Whether or not that will be far enough to reduce the market’s negative view of it is one thing, but the lower immediacy of it may lessen the focus of economists’ “Brexit bias” and allow them to take more seriously what the current state of play means for the long-run outcome of UK rates and GBP, both of which should be higher in our view."