Brexit is back and this time it looks for real. The U.K. government's decision to trigger Article 50 imminently means the start of the official negotiations with the European Union on the exit plan. But while financial markets remain cautious, the tension seems to be less as compared to the June 23 referendum vote.
There are a number of reasons for this. While sterling continues to trade at historically low levels, a plunge that was witnessed after the U.K. voted to leave the EU on June 23, markets have generally priced in the idea of Brexit ever since U.K. Prime Minister Theresa May laid out a plan of action in January.
This week financial markets are extremely distracted by a number of other key events and, if pundits are to be believed, it'll be the Federal Reserve rate decision on Wednesday that the markets will be watching more closely rather than Article 50.
The week will also see Dutch parliamentary elections and Bank of England rate decision. While all these events add uncertainty to markets, investors will certainly keep a close eye on the Fed and Brexit.
The discussions around Brexit divorce proceedings have a sense of déjà vu around them as we restart analysis on what this could mean for Britain. In the days after the U.K. voted to leave the EU, one of the biggest concerns was London losing out on its status of Europe's banking hub. And while there has been a lot of speculation about banks moving out of London, it is still to be seen how things pan out after the negotiations begin.