Was the decision by the UK to leave the EU a non-event? Globally speaking, share prices have increased, the spreads for default risk have narrowed on many markets, and the UK central bank, i.e. the Bank of England, did not cut its key-lending rate. Good growth rate The economic indicators continue to suggest real economic […]
The vote in favour of leaving the EU by the UK means one thing above all: uncertainty. Because the effects on the sentiment and the behaviour of companies, the public, the financial market participants, and the political parties are difficult to predict. Paradoxically, the prices of risky assets such as equities, corporate bonds, and emerging […]
On 23 June the people of the UK voted in favour of an exit from the European Union. Basically the UK thus strengthened its supposed (?) state sovereignty at the expense of the economic advantages of an EU membership. For the rest of the EU, its economic and political clout weakens as a result.
Yesterday’s referendum in the UK surprised with a narrow majority in favour of Brexit. According to the latest results, 51.8% voted for the Brexit, i.e. the exit from the EU. Polls and betting odds had been suggesting a majority in favour of remaining (“Bremain”) in the EU. As expected, Brexit is triggering a massive negative […]
Less than a week is left before the British electorate will decide whether the United Kingdom should remain a member of the European Union (the Bremain scenario) or leave the union, an outcome known as Brexit. Two months ago, when we started covering this event in a series of blogs (see here, here, here and […]
Risk-averse markets The classic indicators on the capital market suggest rising risk with respect to the economy and risky assets. Spreads have widened, and the yield differential between long-term and short-term government bonds has fallen; volatility has increased. Also, the inflation rate priced in has decreased, the Japanese yen and the Swiss franc have appreciated, […]
Stock markets not impressed – so far While the debate about Brexit is getting more intense (just a day ago the UK Treasury released its warnings) and the Pound Sterling is trading near historical lows as the referendum is approaching, the UK equity market has not shown any signs of stress. Its valuation premium to […]
What financial markets are telling us about Brexit The UK’s exit from the European Union – known as “Brexit” – would be a major economic and political event for the UK, Europa and the wider world. While Brexit is not the most likely outcome (see the first blog in this series), it is a real […]
The economic implications of Brexit Opinion polls and betting odds as well as the muted response of debt and equity investors suggest that Brexit – the UK’s exit from the EU – is not the most likely scenario. That said, it cannot be ruled out. For example, about a quarter of all opinion polls conducted […]
The likelihood of Brexit On June 23, 2016 the UK will hold a referendum. Voters will decide whether the country should remain a member of the European Union (the “Bremain”-scenario), or whether it should leave the EU (the “Brexit”-scenario). Arguably, Brexit marks the most significant tail-risk for European and global asset markets in 2016.