Deutsche Bank FX strategy Research advises investors to start rebuilding short GBP positions against EUR and CHF.
"A market-friendly UK election outcome already appears priced and the risks are now skewed to a disappointment. Whatever the outcome, we believe a strong conservative majority is a necessary but not sufficient condition for a "smooth" Brexit. Initial talks look fraught with difficulty and the European stance is hardening. GBP positioning is much lighter, the evidence for a consumer-led slowdown continues to build, and the Bank of England is likely to stay firmly on hold through the remainder of the year.
All this leaves inflows into the UK highly vulnerable to a rapid slowdown,"DB says as a rationale behind this call.
Source of the graph: Bloomberg Pro Terminal
Senan Fuchedzhiev - Trader
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