UK leaving the EU
By: Daniel Viaña | <- - AUTHOR!> elmundo.es | 06/24/2016 | 15:33
FALL OF POUND ATLAS
the worst session of the Ibex 35 in its history. Specifically, in its more than 24-year history. In all that time, nor the attacks in New York of September 11, 2001, nor those who suffered Madrid on March 11, 2004, nor the bankruptcy of Lehman Brothers got what has now led to the departure of the United Kingdom of European Union:. a drop of more than 12 percent to 7,787 points
This alarming movement is a good example of the panic that “brexit” has unleashed among investors around the world and, in the case Ibex, has been particularly devastating for companies with heavy exposure to the UK. Thus, the IAG airline has headlong 26.5 percent, and Banco Sabadell and Banco Santander, more than 18 percent. They have not been far from the only entities that have fallen sharply, and indeed, the entire banking sector has lost in a single day about 28,000 million in terms of capitalization. This situation, coupled with the heavy reliance that the Spanish banking sector has selective, largely explains why the Ibex index has been the worst in Europe.
The risk premium of Spain, meanwhile, it has also He accused the blow they have received markets. Finding shelter by investors, who in recent days had clearly opted for permanence, they have returned to take the German bund to negative levels. Consequently, the country risk of all peripheral countries has been stressed and in the case of Spain it has soared 30 points to the 166 integers.
And, of course, the British pound has been another major victims of indiscriminate selling day. At first, when he began to see the victory of those who want to break with the EU, it fell to 1985 lows against the dollar. Then the collapse has softened slightly but still, the British currency has depreciated by 8 percent against the US and 6 percent against the euro. The London Stock Exchange, however, has been the best it has done throughout Europe since, according adelantaban ago some from JP Morgan and Deutsche Bank, a weak currency will allow British companies to become more competitive by increasing their sales and profits and therefore, making their contributions forward.
“from an economic standpoint, it is expected slower growth in the UK and Europe and that is what we have discounted the bags. we also expect a mild recession in the UK this year and part of next year. However, what matters most is that the political risk premium will rise worldwide and that will pull down valuations. today’s result will have a ripple effect on political risk, “said Dominic Rossi, global chief investment officer of equities area of Fidelity International, to try to explain what happened in the market.
credit rating agency Moody’s also considered relevant the fact that “UK and the European Union will have to negotiate new agreements” in a process that “will be long and complicated,” which will lead to “an extended period of uncertainty period to make a dent in the economy and the financial system of UK” while Daniel Vernazza, chief economist at UniCredit in London believes that “any of the alternatives to trade relations between the EU and the UK will have a cost to the UK economy”.
Bank of America, even, it has already made a forecast of how it will affect the “brexit” UK and the European Union in terms of growth. To date, the estimate of one of the largest US banks was that the British economy would grow by 2.3 percent next year; after knowing the referendum result, analysts have reduced their number to just 0.2 percent. The whole Union will also be affected according to estimates, as growth will fall from 1.6 percent to 1.1 percent.
Given this complex scenario, the Bank of England (BoE, in English) he has tried to calm the market claiming that has 310,000 million euros to support the British financial system. Less specific are both the European Central Bank (ECB) and the US Federal Reserve (Fed), which have said they are willing to inject liquidity into the system if necessary.
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Tags: & amp; quotbrexit & amp; quot, sinks, m & aacutes, <- End full story -> <- - IP 181 114 126 137!> ibex, worse, session & amp; oacuten, history
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