Currently, the range of potential results includes: a May resignation, an unauthorized vote in the government, a elections, a second…
Currently, the range of potential results includes: a May resignation, an unauthorized vote in the government, a elections, a second referendum on EU membership, a temporary halt to Britain’s recall, or possibly some form of combination of all the above.
“If anything, the events of the past two weeks suggest that the distribution looks much more uniform,” said strategists at Nomura in a research report published this week.
“In other words, high levels of uncertainty give all possible results as much probability, including the tail risks of” no deal “on the one hand, but remain in the EU as the other.”
Sterling has dropped about 11 percent against US dollars since it peaked at $ 1.4335 in April 2018, partly due to increasing concerns during the Brexit process. The US currency was traded at about $ 1.2760 on Friday morning.
“We would expect a global coordinated central bank’s response to a global financial market melting on a tough Brexit, such as liquidity support through currency swap arrangements and any foreign exchange intervention,” said Nomura’s strategists, looking at the risk of financial market infection.
“But we would stress that it may not be necessary if: a) we do not witness a financial slowdown or b) no agreement Brexit planning finds very necessary efforts towards the last few weeks before Brexit day.”
– CNBC’s David Reid contributed to this report.