they have not even begun to think about no transition. the eu always does a deal at the eleventh hour and most expect the same this time. but johnson isnt interested. they didnt believe he'll go ahead with brexit but he did. they will be wrong again. there will be no extension asked for come june 30th. so the transition will end dec 31st 2020. then mkt will again assume a last minute deal for new trade arrangement post 2020. the uk isnt interested in caving in and will not, that just leaves the eu, if it is willing to cave in or let it go to bare bones and wto terms. with economies already suffering from covid, the downside risks to full wto don't look so bad, but even still many assume the eu will cave in last minute to do a deal. but we aren't talking about greece here, its the uk and they won't let it be fudged. the risk to this argument is boris losing political capital and friends in the meantime, allowing the remainers to shackle him, something they cannot dream of doing today.
but to get back to your question, the lack of a transition extension is not even 1% priced in here. for now other arguments take priority. once fed is out of way, the last week or two of june should be a weak ones for sterling.
UK JY 11:34:40 GMT - 06/10/2020
Red do you think that no transition is already discounted?
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