IT’S NOT TIME FOR CHAMPAGNE YET

Excitement among investors fades after reality check but IMF and World Bank are hopeful

For a while there, investors and analysts got a taste of what’s in store if they ever escape the long shadow of Brexit. Unfortunately, most of them think freedom is still a long way off, even as the International Monetary Fund and World Bank see the Brexit deal boosting the global growth outlook.

Assets across Europe briefly surged on Thursday as the markets embraced the news that a deal had been struck in Brussels. But as traders assessed the obstacles ahead, the giddy mood faded. The deal — struck just in time to present to European Union (EU) leaders as they gather in Belgium’s capital — still needs the approval of the British Parliament. Northern Ireland’s Democratic Unionist Party (DUP), whose vote may be the key, has said it will not back the accord.

“It might not be time to pop open the champagne quite yet,” said Jim Mccormick, the global head of strategy at Natwest Markets.

The potential for the pound to rally, according to Petr Krpata, chief currency strategist of ING Bank, is “watered down by the DUP comments and the subsequent uncertainty about the outcome of the Parliamentary vote.”

Investors should not be too enthusiastic as the endless negotiations and uncertainty over the past three years will take its toll on the country, the experts said.

On the other hand, World Bank President David Malpass said clarity over Brexit would strengthen the outlook for global growth, aiding both rich nations and the developing world.

Kristalina Georgieva, managing director of the International Monetary Fund, called the agreement “good news”, and said she hoped the will to complete the deal “holds in all quarters.”