Brexit Talks On Hold As "May's Team Can't Agree", Cable Slides

The neverending Brexit saga, replete with endless trial balloons and head fake headlines, took its latest detour into the unknown, and sent cable sliding, after the latest report from Bloomberg that U.K. Prime Minister Theresa May’s Cabinet is not close enough to agreeing a way forward for top level Brexit negotiations to resume, even as time to reach a deal is running short.

According to Bloomberg sources, "there will almost certainly be no new plan put forward by the British side before next Monday’s budget, the annual statement setting out the government’s tax and spending plans for the next year."

The latest disappointing, if expected, assessment followed a "stormy meeting" of May’s cabinet on Tuesday, when two factions battled each other over the question of how to avoid customs checks at the Irish border without tying the U.K. into the European Union’s trade regime forever. Two days later, a meeting that was called to discuss the issue on Thursday was canceled because agreement within May’s team is still out of reach, according to a report in the Evening Standard newspaper.

Divisions within the U.K. negotiating team meant a draft agreement was vetoed by May’s ministers, notably Brexit Secretary Dominic Raab, the people said. At the summit in Brussels, May offered further compromises, pledging to consider extending the transition period and to drop her demand for a strict end-date to the so-called backstop arrangement for the Irish border.

Predictably, the pound dipped on the news, and is now trading well below its 50 and 100-DMA, although much of its losses have been a function of the stronger dollar.

That said, with kneejerk reactions such as this one it would be difficult to claim that a hard Brexit is fully baked into the cake.