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State Street Comments on the UK Prime Minister’s speech in Florence

In reaction to the UK Prime Minister, Theresa May’s speech in Florence today, Tim Graf, EMEA head of macro strategy at State Street Global Markets, offers his views.

Graf comments, “After great anticipation, Prime Minister Theresa May’s Florence speech offered few specifics and even fewer surprises. The main takeaway for markets is a more formally expressed desire to pursue a transitional arrangement of ‘around two years’, from when the time limit following the triggering of Article 50 expires, presumably beginning from March 2019. For the near-term, negotiations may likely be hampered by the lack of detail offered on the main items for discussion, namely the Irish border question, the ultimate financial settlement with the EU and the rights of EU citizens. European Commission Chief Negotiator Michel Barnier was not given much new to work with on these points. While the pound weakened and UK rates fell during the speech, these moves were quite muted, perhaps an appropriate reaction to a speech carrying very little new information.”

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