Rochester: U.S. Election Not as Hedged as Brexit

The transcript discusses the potential risks and market reactions related to the upcoming election and Brexit. It covers the impact of polls on market strategies, particularly in foreign exchange, and highlights the importance of hedging. The discussion includes investment strategies, focusing on the Mexican peso as a proxy for election outcomes, and the FTSE 250's resilience amid Brexit uncertainties. The Bank of England's stance on foreign exchange intervention is also examined.

What is the main reason for putting money on the sidelines according to the discussion?

• To invest in emerging markets

• Because of a strong economic forecast

• Due to the uncertainty of the election outcome

• To avoid high transaction fees

Why is the Mexican peso considered a significant proxy in the U.S. election?

• Due to its high interest rates

• Because it is a stable currency

• Due to its strong ties with the Euro

• Because it reflects market sentiment towards a Trump victory

What was the market's reaction to the polls turning towards 'remain' during Brexit?

• Increased volatility before the vote

• A decrease in market activity

• A significant drop in the pound's value

• Stability in the market

What is the expected impact on the Footsie 250 due to Brexit uncertainties?

• No impact at all

• Stability due to foreign investments

• A large correction due to domestic consumption reliance

• A significant increase in value

What is the Bank of England's stance on intervening in the foreign exchange market?

• They are unlikely to intervene

• They have already intervened

• They will intervene if the pound strengthens

• They are likely to intervene soon