Johnson waiting for US election result before no-deal Brexit decision

Ivan Rogers, who was the UK’s permanent representative in Brussels from 2013 to 2017, told the Observer “several very senior sources in capitals have told him they believe Johnson will await clarity on the presidential election result before finally deciding whether to jump to ‘no deal’ with the EU.

Several very senior sources in capitals have told me they believe Johnson will await clarity on the presidential election result before finally deciding whether to jump to ‘no deal’ with the EU, or to conclude that this is just too risky with Biden heading for the White House, and hence live with some highly suboptimal (for Johnson) skinny free-trade agreement.

Rogers said that if Trump won he and others in Europe believed Johnson would think “history was going his way” with his rightwing ally still in the White House.

Market implications

A Biden administration will likely prioritise rebuilding relations with the EU that have been damaged by Trump's populist bias and thus favour a US-EU trade deal over one with the UK.

Such sentiment is negative for sterling.