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MBS Day Ahead: Strange Combination of Pre-Brexit Paralysis and Jumpiness

Posted To: MBS Commentary

Yesterday brought the highest yields in a month as Brexit-related optimism swelled early in the overnight session. At issue: British PM Johnson and EU negotiators reached "a deal." Great! Right? Brexit is solved? But wait... British parliament would still need to sign off on the deal, and the news was quick to point out the relative impossibility of such a thing. As such, overnight market movement began to reverse course even before US markets opened. That brings us to today. Traders know that an easy passage of the current deal is unlikely. But they also know that the deal could be adjusted or debated in such a way that passage is not impossible. Adding to the uncertainty is the fact that the EU could respond in one of two ways if there's no deal by the end of the month (grant...(read more)