Brexit remains a chronic issue – BBH

Brexit remains a chronic issue and is not going away anytime soon as the hawkishness of the BOE ensured no dissents but was predicated on not Brexit shocks, suggests the research team at BBH.  

Key Quotes

“You could barely say "bangers and mash" three times before the market sold sterling as it pushed above $1.40 and the euro approached the lower end of its five-month range against sterling (~GBP0.8700).    Sterling weakened despite the market upgrading the chances of a May hike from a little less than a 50/50 proposition to a nearly 2/3 favorite.”

“Within 24 hours or so of Governor Carney's press conference, the EU's chief negotiator Barnier suggested that talks were going so poorly that perhaps a transition period would not be agreed up.  Investors had already been informed that an agreement by the March summit was "ambitious."  The EU continues to show a united front and firm positions, while the UK does not quite seem to know what to do, or what it wants.  The risk of a policy mistake, even if only knowable in hindsight, appears high.”