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The 27 European Union countries that will remain after Brexit hope to agree on Monday to delay Britain’s divorce until Jan.31 with an earlier departure possible should the factious UK parliament ratify their separation deal, sources said.

British Prime Minister Boris Johnson last week reluctantly requested the three-month delay until the end of January, 2020, after the parliament’s lower House of Commons refused to swiftly approve a new Brexit deal he had agreed with the bloc.

Any postponement to Brexit can only be granted unanimously by the 27 and French objections have so far prevented a decision as Johnson spars with lawmakers over calling an early election.

Diplomatic sources told Reuters the bloc’s 27 EU ambassadors would meet at 0900 GMT on Monday in Brussels to agree on the three-month delay from the current Brexit date of Oct. 31.

The latest plan envisages that Britain could also be out on Dec.1 or Jan.1 should the parliament ratify the agreement in November or December, respectively, according to diplomats who deal with Brexit in the EU hub, Brussels.

The bloc will state that the extension, the third granted so Britain can sort out its departure, will not be used to renegotiate the divorce treaty again and that London should not impede other essential work by the EU on projects from budgets to climate policies. […]

Boris Johnson’s government stepped up pressure on lawmakers on Sunday to back the prime minister’s bid to hold an early election and break the Brexit impasse, saying Britain was being held “hostage” by parliament.

But with the main opposition Labour Party waiting for the European Union to grant a Brexit delay and two other parties launching their own bid for an even earlier election, the government’s bid so far looks set to fail.

Britain was due to leave the EU on Thursday, but despite the government arguing this is still the legal default date, few expect Johnson to meet his “do or die” promise to deliver Brexit on Oct. 31 after the bloc agreed to another delay.

More than three years since Britain voted to leave the EU, the divided country and its parliament are still debating over how, when and even whether Brexit, Britain’s biggest policy shift for more than 40 years, should happen. […]

UK PM Johnson: Up To EU To Decide On Brexit Delay, We Can Leave On Oct 1
-We Will Give Time For A Brexit Debate If An Election Is Agreed
-Totally Against Brexit Extension And The UK Should Be Leaving The EU On October 31 […]

LiveSquawk on Twitter

• The Fed is widely expected to cut rates by a quarter point next week, but economists say some of the arguments for a rate cut are not as strong as they had been.
• The trade war has calmed down somewhat, and that was one factor that the Fed had pointed to as a risk for the economy.
• “It’s not a foregone conclusion they cut at this meeting,” said one economist. […]

Top U.S. and Chinese trade officials will discuss plans on Friday for China to buy more U.S. farm products, but in return, Beijing will request cancellation of some planned and existing U.S. tariffs on Chinese imports, people briefed on the talks told Reuters.

Robert Lighthizer, the United States Trade Representative, U.S. Treasury Secretary Steven Mnuchin, and Chinese Vice Premier Liu He will speak by telephone Friday, their latest attempt to calm a nearly 16-month trade war that is roiling financial markets, disrupting supply chains and slowing global economic growth.

The two sides are working to try to agree on a text for a “Phase 1” trade agreement announced by U.S. President Donald Trump on Oct. 11, in time for him to sign it with China’s President Xi Jinping next month at a summit in Chile.

So far, Trump has only agreed to cancel an Oct. 15 increase in tariffs on $250 billion in Chinese goods as part of understandings reached on agricultural purchases, increased access to China’s financial services markets, improved protections for intellectual property rights and a currency pact.

But to seal the deal, Beijing is expected to ask Washington to drop its plan to impose tariffs on $156 billion worth of Chinese goods, including cell phones, laptop computers and toys, on Dec. 15, two U.S.-based sources told Reuters.

Beijing also is likely to seek removal of 15% tariffs imposed on Sept. 1 on about $125 billion of Chinese goods, one of the sources said. Trump imposed the tariffs in August after a failed round of talks, effectively setting up punitive duties on nearly all of the $550 billion in U.S. imports from China.

“The Chinese want to get back to tariffs on just the original $250 billion in goods,” the source said.

Derek Scissors, a resident scholar and China expert at the American Enterprise Institute in Washington, said the original goal of the early October talks was to finalize a text on intellectual property, agriculture and market access to pave the way for a postponement of the Dec. 15 tariffs.

“It’s odd that (the president) was so upbeat with Liu He and yet we still don’t have the Dec. 15 tariffs taken off the table,” Scissors said.

U.S. Treasury Secretary Steven Mnuchin said last week said no decisions were made about the Dec. 15 tariffs, but added: “We’ll address that as we continue to have conversations.” […]

Draghi: The Governing Council reiterated the need for a highly accommodative stance of monetary policy for a prolonged period of time to support underlying inflation pressures and headline inflation developments over medium terma […]

European Central Bank on Twitter

Draghi: We expect net purchases to run for as long as necessary to reinforce the accommodative impact of our policy rates, and to end shortly before we start raising the key ECB interest rates […]

European Central Bank on Twitter

Draghi: We expect ECB interest rates to remain at present or lower levels until we have seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within our projection horizon… (1/2) […]

European Central Bank on Twitter

Draghi: The Governing Council continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry […]

European Central Bank on Twitter