A tenth day of the referendum in which the British decide whether the UK remains within the European Union or not, the latest polls show that supporters not have shortened the distance with the Self. This news has global markets on edge.
a poll published on Friday, for example, indicated that 55% of British would vote in favor of leaving the EU.
Asian stock markets were the first to react. On Monday, the Nikkei index of the Tokyo Stock Exchange fell 3.5% as investors gave off their stocks and flocked to safe havens. The bonds of the governments of Japan and South Korea reached historic lows. The yen, considered the safest currency in Asia, strengthened against the euro and reached its maximum of three years against the pound sterling, which so far this year, according to the Bank of England, has accumulated a 5.7% drop against a basket of currencies.
Meanwhile, the pan-European Stoxx Europe 600 index gave up 1.8% to settle at 326.80 points, its lowest level since February, and the benchmarks of exchanges in London, Frankfurt and Paris fell 1.16%, 1.80% and 1.85%, respectively.
The Dow Jones Industrial average fell 133 points, or 0.7%, to 17,732 units . The index S & amp; P 500 fell 0.8% and the Nasdaq Composite fell 0.9%
The yield on the benchmark 10-year US Treasury fell to 1.611%, its lowest level since. December 2012, according to data provider FactSet. The yield on German 10-year bond, known as bund, round 0.025%, at least according to Tradeweb. The bonus 10-year British government, meanwhile, yielding 1.211%, near a record low. Bond yields move in the opposite direction to prices and its fall reflects high demand.
In the case of US Treasury bonds, demand has been “driven by investors foreigners who face the possibility of negative returns. the US sovereign debt has become more attractive to foreign investors as the ECB and the Bank of Japan implemented policies negative rates “, he said by email Jason Pride, director of investment strategy Glenmeade.
British referendum on June 23 will take place at a delicate moment. This week, the Federal Reserve of the United States and the Bank of Japan will decide on the progress of their respective economies and the outlook for interest rates, while MSCI Inc. announce whether mainland Chinese companies will be part of its popular indexes of emerging market stocks.
investors have virtually ruled out a rate hike on Wednesday, when he concludes the two-day meeting of the US central bank. An indicator widely followed by the market assigns a probability of 2% to an increase in rates on Wednesday and 23% in July.
Although the selloff Monday spread throughout the world, Europe it is especially vulnerable. Britain has been one of Europe’s best performing economies in recent years, and most economists believe that a vote to leave the EU hit hard investment, probablmente affecting consumption and overall growth.
European banks, meanwhile, are struggling to overcome the crisis of last year and remain vulnerable to financial turmoil. Italian banks, for example, are riddled with bad loans and sustained economic improvement need to leave the tunnel.
This volatility underscores the concern that UK output of the European Union a phenomenon popularly known as brexit- impact on the European economy and affect exports around the world.
“investors are concerned about the return of the scenario of global stagnation, and the possibility of brexit exacerbates this scenario,” he said Khiem Do, multi-asset fund manager at Baring Asset Management in Hong Kong. The strategist believes that if the UK is removed from the EU, investors believe that central banks will implement measures to shore up growth. But, for the moment, “not believe that central banks and governments can intervene quickly enough to counter the worst scenario,” he said.
In any case, analysts and fund managers indicated that the overall impact is likely to be caused by brexit content.
the European authorities have already put to work in this direction. The supervisor of the banking EU has contingency plans in case the British speak out in favor of No.
Daniele Nouy, Chair of the Supervisory Board of the single supervisory mechanism of the European Central Bank he said Monday that both the council and the ECB have been prepared meticulously for the referendum and its possible impact on markets. “This is done by bank bank,” he said. “For every bank that is likely to result impacted, we have a document drafted by national supervisors and the euro zone plan,” Nouy said in an appearance before the Committee on Economic and Monetary Affairs of the European Parliament.
In his Yes campaign for the British government, led by Prime Minister David Cameron conservative, has had the help of some of the heavyweights. James Dimon, chief executive J.P. Morgan Chase & amp; Co. recently traveled to London and warned in a meeting with bank employees who Brexit could result in the flight of thousands of jobs in the country. George Osborne, finance minister of the United Kingdom, was present at the meeting.
Although it is presumed that the British majors will be affected by an eventual exit from the EU, also po-dria be exceptions, such as the maker of raincoats and luxury scarves Burberry and microprocessor designer ARM Holdings.
in the case of Burberry, about 15% of its costs of manufacturing and 40% of its operating expenses are denominated in pounds sterling, although Britain only represents 10% of its sales. Barclays Bank estimates that a 10% drop in the British pound increase operating profit by a fifth.
ARM Holdings, whose processor designs are present in all kinds of devices, from radiators to smartphones, you get for its part the overwhelming majority of its sales in dollars, although two-fifths of its costs are denominated in sterling, according to broker Liberum values.
-Gabriele Steinhauser, Max Colchester, Simon Clark, Stephen Wilmot, Riva Gold and Aaron Kuriloff contributed to this article.
No comments:
Post a Comment