Bundesbank´s Dombret is in London today and guess what he is talking about. Obviously, Brexit and how everything will look like after the Brexit departure, from the single market to the banking system, etc.
He´s saying that the EU passporting system for goods, services and labour can´t be matched by an equivalence system, which would mean that equivalent goods and services can cross borders between the EU and the UK without going through customs.
This specifically refers to the banking sector, so it´s going to be a big burden for the massive UK financial sector. But, Dombret also highlighted that a transition deal would ease the pressure on banks.
The chances of Britain gaining full EU market access looks really minimal and Dombret just said that a clean break from the single market would be the end of London as a gateway to Europe.
He´s right to some degree, but no one really knows how it will all end. Anyway, our EUR/USD signal is still on despite the 15 pip jump in the last hour, but we´re still beneath the moving averages we highlighted in the previous market update.