Markets Should Reflect Higher Risk of Hard Brexit or Corbyn Premiership: Deutsche Bank

The video discusses the impact of Brexit on the sterling, focusing on its trade-weighted value rather than just against the dollar. It highlights the market's pricing of Brexit outcomes and the potential risks of a hard Brexit or a Corbyn premiership. The discussion also covers the political uncertainty within the Conservative Party and the possibility of a second referendum, which could lead to further political changes.

What is the advantage of using trade-weighted measures over focusing solely on sterling against the dollar?

• It focuses on short-term fluctuations.

• It provides a historical perspective.

• It simplifies the calculation process.

• It eliminates the dollar beta effect.

What are the potential risks discussed in relation to the Conservative Party's electoral process?

• A stronger pound.

• A hard Brexit or early election.

• A stable political environment.

• Increased trade with the EU.

What could lead to a Corbyn premiership according to the discussion?

• A coalition with the Conservative Party.

• A decrease in public support for Brexit.

• A successful trade deal with the EU.

• A second referendum or vote of no confidence.

Why is the probability of a Corbyn government considered to be rising?

• Because of a strong Conservative majority.

• As a result of economic growth.

• Because of new political avenues opening up.

• Due to increased public support for Brexit.

What is not considered the main scenario despite its rising probability?

• A stable pound.

• A Corbyn government.

• A hard Brexit.

• A new trade agreement.