FTSE 100 price recovers ahead of crucial Brexit trade talks
- The UK is due to leave the EU on December 31, leaving only 4 weeks for a Brexit trade deal to be reached
- Both sides voiced their concerns that the time is running out
- FTSE 100 price gained 1.95% yesterday to almost erase all losses from Monday
FTSE 100 price is trading around 0.35% higher today after making solid gains yesterday ahead of the crucial talks between the United Kingdom and the European Union on Brexit trade agreement.
Fundamental analysis: Sides running out of time to reach an agreement
Both sides have raised their concerns that they’re running out of time to strike a Brexit trade deal. The UK is due to leave the EU on December 31 with only 4 weeks left for two negotiation teams to reach an agreement and get two Parliaments to approve it.
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“We really are now running out of time. This is the crucial week — we need to get a breakthrough,” British Environment Secretary George Eustice said.
In a similar manner, the EU officials raised similar concerns.
“We are running out of time here. The truth of Brexit is now being exposed in terms of the challenges of it,” said Irish Brexit supremo and Foreign Minister Simon Coveney.
In case two sides cannot agree on trade deals, analysts believe that this scenario will yield higher costs and barriers for exporters from both sides. At this point, two sides are at distance in the areas of state aid, fishing rights and how to resolve future disputes.
“The British need a deal more than we do. The Europeans must be confident of this, and confident of their strength in this negotiation,” France’s Europe minister, Clement Beaune, said.
CNBC reported earlier, citing a source close to the EU, that the finalization of negotiations between two sides rests on the phone call between Boris Johnson and his counterpart Ursula von der Leyen.
Technical analysis: FTSE 100 recovers
FTSE 100 price gained 1.95% yesterday to almost erase all losses from Monday on the improving risk sentiment related to positive vaccine news. However, it is unlikely that we will see a bigger move in either direction before there’s more clarity on the Brexit trade deal.
The area around 6500 remains a key resistance zone for the buyers while 6250 and 6170 offer support in case the price action corrects lower on worsening risk sentiment.
It seems that the time is running out for the European Union and Britain to reach an agreement on the Brexit trade deal, while FTSE investors still look positive about the overall prospects.