Money managers and their representative association have welcomed progress in negotiations over the U.K.'s exit from the European Union.
A joint statement by the U.K. and the EU Friday said both parties have reached an agreement in principle in three areas: protecting the rights of EU citizens in the U.K. and U.K. citizens in the EU; the Northern Ireland border; and the financial settlement on various programs.
The announcement was welcomed for alleviating the pressure and likelihood of a no-deal scenario, said commentary by the money management industry.
"Businesses up and down the U.K., as well as across the EU, will be breathing a sigh of relief today that progress has been made in the Brexit negotiations, allowing the next phase of talks to start," said a comment by Chris Cummings, CEO of the Investment Association, which represents U.K. money management. "The announcement is a welcome step, which allows businesses to set aside plans for a disastrous no-deal scenario, and firms can now focus their attention on planning for a more positive outcome and looking after their savers and investors across the U.K. and EU."
Mr. Cummings added that the IA will work with the U.K. government and European partners "to help to shape the transition period and the ensuing free trade agreement that will govern our future relationship. Top of our list of priorities is making sure regulatory cooperation agreements are in place to protect financial stability and working toward a new regulatory architecture that will help the industry prosper long term."
A separate comment by David Page, senior economist at AXA Investment Managers, said the announcement "does nothing to shed light on what a future U.K.-EU arrangement might look like. But it paves the way to providing more time to reach such an arrangement."
Markets reacted positively to the news. Two-year government bond yields rose 4 basis points, while 10-year yields rose 5 basis points, to 0.54% and 1.3%, respectively. Sterling jumped to $1.35 following the news, from $1.338 at the U.K. market open Friday.