Forex - EUR/USD, EUR/JPY Flows: Brussels is starting systematically to shut out British groups from multibillion-euro contract


 05:58 (GMT) 20 Apr

  [Forex Flows]

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EUR/USD, EUR/JPY Flows: Brussels is starting systematically to shut out British groups from multibillion-euro contract (0100-NGPM-C01)

FT: Brussels is starting systematically to shut out British groups from multibillion-euro contracts and urging companies to decamp to one of the 27 remaining EU members as it prepares for Brexit. In an internal memo seen by the Financial Times, top European Commission officials have told staff to avoid "unnecessary additional complications" with Britain before 2019, highlighting an administrative chill that is biting even before Britain leaves the bloc. It explicitly calls on EU staff to begin encouraging the UK-based private sector to prepare for the "legal repercussions" of Brexit and consider the need "to have an office in the EU" to maintain their operating permits. Agencies are also told to prepare to "disconnect" the UK from sensitive databases, potentially on the day of Brexit.

EURUSD still trading strongly above 1.0700, while EURJPY is threatening to break 117.00 again. As we wrote in our previous flow, the chances of a Melenchon/ Le Pen match up has been under priced, in our view, and given that both candidates support Frexit, opening EUR prices next week would find it find a bid should the match up materialise. As such, EURJPY offers near 117.00 and EURUSD offers above 1.0700 actually present a very attractive risk to reward profile, toward the end of the week. However, it would be best to keep stops tight, at >1.0750 in EURUSD and >117.20 in EURJPY


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