Why Markets Can Benefit From a 'Hard Brexit'

The video discusses the economic implications of Brexit, focusing on investment flows, currency impacts, and market reactions. It highlights the slowing of foreign direct investment in the UK and its negative effect on the pound. The discussion also covers inflation dynamics, bond yields, and the reluctance of the Bank of England to tighten monetary policy. The video concludes with a comparison of economic momentum in the UK and Eurozone, noting the challenges in predicting currency pair movements.

What is one of the main concerns regarding investment flows into the UK post-Brexit?

• Weakening of M&A flows

• Increase in foreign direct investment

• Rise in interest rates

• Stability of the pound

How does the global demand for duration affect UK bond yields?

• It decreases the demand for UK bonds

• It makes UK yields appear out of line

• It increases the demand for UK bonds

• It has no effect on UK bond yields

What is a potential market reaction to the certainty of a hard Brexit?

• Increased uncertainty in markets

• Stability in the pound and guilds

• Decreased investment in the UK

• Markets moving on to new drivers

What is the current stance of monetary policy in the UK and Eurozone?

• No change in policy

• Reluctance to tighten

• Aggressive tightening

• Immediate easing

What challenge is faced when predicting movements in the Euro-sterling currency pair?

• Divergent economic conditions

• Similar economic momentum

• High volatility in markets

• Lack of historical data