Brexit Outcome Still Too Close To Call: Deutsche Bank

Though the Brexit risk premium was partly reversed with the recent swing back in favor of Remain, the outcome of the referendum remains too close to call, note Deutsche Bank analysts. A material shock from the U.K. referendum would trigger a forceful central bank response, while absent a shock, attention should shift back to fundamentals, wrote Marcus Arana and colleagues in their June 21 research piece titled “Brexit: Decision time.”

Brexit risk pricing partly reversed

Noting that the June 23 U.K. referendum has been the dominant theme for the markets for quite some time, the DB analysts point out that the markets went from pricing in very little odds to pricing about 50-50 odds as the Leave side gained momentum. However,...