BREXIT LIVE: Johnson and Juncker say Brexit deal is done: now the hard part begins
UK government 10-year bond yield pushed to 0.76 per cent but many obstacles to Parliamentary approval remain
After a turbulent day in European politics, the EU and the UK have reached a Brexit agreement. However, UK Prime Minister Boris Johnson faces several challenges before the deal can be passed.
The UK Parliament will meet on Saturday 19 October for a crucial Commons vote, which many think the PM won’t win without the support of the Democratic Unionist Party (DUP). The Northern Ireland party has already said it won’t back the deal.
Barrister and anti-Brexit campaigner Jo Maugham has now lodged an urgent new legal challenge in the Scottish courts that he hopes will be heard on Friday 18 October. The challenge aims to prevent the government from placing the Withdrawal Agreement before Parliament for approval. It centres around separate customs arrangements for Northern Ireland.
Sterling rose to $1.29 for the first time since May after the deal was announced, with commentators predicting the pound to hit $1.35 and UK financial assets to rally if the deal is approved. UK government bonds were selling off, pushing the 10-year yield to 0.76 per cent.
However, sterling had fallen back below $1.28 by early afternoon, when the DUP announced it would not back the deal because it "drives a coach and horses" through the Good Friday agreement.
This fresh uncertainty could pave the way for a bid to secure a second referendum, though how that would play out in the time left is unclear.
Writing in the Financial Times, markets expert Michael MacKenzie said traders are favouring downside protection against a fall in the pound over the next few months.
Shard Capital strategist Bill Blain said: "There's not really enough time for Parliament to debate it properly and agree what goes through. So the only thing I can say with any certainty on Brexit is that it's going to remain very uncertain."