CIBC Says Brexit's Downside Sterling Risks Far Outweigh the Topside

The video discusses the complexities of binary risk in sterling, emphasizing the significant downside risks that outweigh potential upsides. It highlights the market's focus on the 125 and 123.5 levels, especially with the looming threat of a no-deal Brexit. The European Union's contingency planning is noted as more robust than the UK's, adding pressure on sterling. Additionally, euro sterling remains stable, partly due to euro weakness, affecting its potential to rise.

What is the primary concern regarding sterling as discussed in the first section?

• The potential for a sudden rally

• The impact of euro strength

• The binary nature of its risks

• The downside risks outweighing the upsides

What market level is considered significant for sterling in the second section?

• 135

• 120

• 125

• 130

What is a potential consequence of continued political inertia mentioned in the second section?

• Strengthening of the euro

• Amplified risks of a no-deal

• A sudden resolution

• Immediate market stability

How does the European Union's preparation for a no-deal scenario affect sterling?

• It strengthens sterling

• It causes sterling to rally

• It puts further pressure on sterling

• It has no effect

What is one reason for euro sterling's lack of movement as discussed in the final section?

• Euro strength against the dollar

• Euro weakness against the dollar

• Sterling's sudden rally

• Political stability in the UK