Via a weekend note from Nordea, recommending long EUR/GBP
Citing:
- Biden ... may not be too keen to give BoJo a nice trade deal
(Note, ICYMI, BoJo is Boris Johnson., UK Prime Minister .... back to Nordea)
- Trump and BoJo have been “partners in crime” during the whole Brexit soap opera, why BoJo is likely one of the few European leaders that will not salute the Biden victory.
- The devils advocate would argue that this makes a deal between UK and EU more likely as BoJo has no other “exit-plan” now that Trump is out. We still doubt that as BoJo has promised the population not to give in to Brussel demands.
- The option market is obviously already very skewed towards a risk of a black-swan event on the topside in EUR/GBP, but for now it may make sense to chase the Biden news via a long EUR/GBP position. Should we get a break-down of UK/EU negotiations, then it may turn in to the biggest “buy the rumour, sell the fact” event in years in EUR/GBP.
