Will the outcome of the UK referendum “calm” the financial markets?

A view inside the London Stock Exchange. © European Union , 2015 / Source: EC – Audiovisual Service / Location: London - Stock Exchange. Photo: Jack Taylor

A view inside the London Stock Exchange.
© European Union , 2015 / Source: EC – Audiovisual Service /
Location: London – Stock Exchange. Photo: Jack Taylor

Just one day left for both the Remain and Leave campaigners to persuade the undecided Britons to vote in their favor promoting what is best for their country. The world is about to finally find out what will be the outcome of the UK referendum with the reports and polls already showing reverse results compared to last week on the aftermath of the murder of the British MP Jo Cox.

However, quite a few undecided voters seem to have made up their minds according to recent polls supporting the Remain campaign and forcing the financial markets to rise. As this newspaper reported last week with its article “Brexit update: Leave campaign leads race but undecided voters will determine the outcome of the EU referendum”, the British people are most likely to vote “in” the EU in order to keep their status quo intact. The latter would certainly relieve the rest of the world which has been worrying about a possible Brexit and its dreadful consequences.

Polls and surveys show ‘Bremain’

Survation opinion telephone poll organized for the Sunday Mail gave a 3% lead to the Remain campaign. What is more, the internet poll from YouGov showed similar results giving small chances to the Brexit event.

It needs to be underlined that both polls were conducted after Cox’s murder. Opinion polls that were released before that tragic event were showing a neck and neck race (Opinium for the Observer) or that the Leave campaign was winning (YouGov for the Sunday Times). Furthermore, the betting companies Betfair and Ladbrokers foresee a propability of 73% that Britain will remain in the bloc.

Besides, Europe-wide survey published by Bertelsmann Stiftung last Monday shows that most EU citizens want the UK to stay in the EU. More specifically, 54% of the participants are expressed positively while 21% thinks that Britain should leave the EU. It is also remarkable that 25% of the French are not supporting the idea of the UK being a member of the EU and 33% are not sure.

Brexit’s impact

SyndicateRoom, a UK-based equity platform, has revealed that a Brexit vote would risk two trillion pounds of personal investment affecting UK businesses and households. Goncalo de Vasconcelos, CEO and co-founder of SyndicateRoom underlined that: “The research reveals that UK households would be adversely affected by a Brexit vote. Our findings demonstrate that in times of uncertainty, investors should give added attention to portfolio diversification, given the evident risk in the property market.”

Financial markets climb

The recent change in the referendum lead has caused the financial markets to go up. The sterling has raised against the dollar and the euro this week and will keep on doing so as the Bremain result seems more likely. The exchange rate of the gbp/euro has climbed to 1.3029 while the gbp-usd exchange rate jumped to 1.4737. The latter was a result of the latest polls where it was shown that the UK is likely to remain within the EU.

On the equity side, the same is happening at all major stock exchanges which are experiencing gains. The London Stock exchange represented by the FTSE 100 closed higher yesterday at 6,226.55 together with Germany’s DAX 30 (+0.54%), France’s CAC 40 (+0.61%) and Stock Europe 600 (+0.70%). Also, the U.S. and Asian stocks and shares rose too showing that the alternation in the outcome of the referendum is highly affecting the entire world economy.

The markets will keep on volatizing

The next days will be extremely volatile for the financial markets and all investors and traders will be trying to make money and hedge their positions by minimising their risk. Thus, whatever the outcome of the referendum, there will be a short-term severe reaction which will cause turbulences to the markets.

The chair of the U.S. Federal Reserve mentioned on the issue: “The market reaction could result in a risk off sentiment that we would see impact on the financial markets”.

However, the exchange rates and stocks will probably stabilize in the medium and long run absorbing the consequences of the EU referendum.

ECB is ready to act and political leaders convene

The governor of the European Central Bank (ECB), Mario Draghi, mentioned after ECB’s executive board meeting that the ECB has taken all measures to deal with possible Brexit consequences to the European economies and financial markets. Mario Draghi said yesterday: “We’ve done all the preparation that is necessary now. It was very difficult to foresee the impact and various dimensions of how the vote in the UK will impact markets and the economies of the eurozone”.

In addition, the president of the European Union, Donald Tusk, the President of the European Commission, Jean-Claude Juncker and the Dutch Prime Minister Mark Rutte will hold a meeting on Friday to discuss about the outcome of the referendum.

The importance of this referendum is substantial but it remains to be seen whether Europe and the world is actually ready for an exit that was never actually predicted to happen.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

EU decides “in absentia” of civil society

Safer products: stepping up checks and inspections to protect consumers

Minority governments ‘à la mode’ in Europe but can they last long?

Jade Spring Meeting 2017 – day 2: Coporate workshops, general assembly and magna moment

South Eurozone urgently needs fairer distribution of taxation burden

UN rights office calls for action to end ‘repression and retaliation’ in crisis-torn Nicaragua

Samsung’s profits fall as cheaper smartphones gain market share

EU budget: Commission proposes most ambitious Research and Innovation programme yet

Brussels Vs. Google: The €1 bn EU fine and the US response

Here’s how we get businesses to harmonize on climate change

Neelie Kroes at the European Young Innovators Forum: Unconvention 2014

EU to spend €135.5 billion in 2014 or 6.5% less than this year

EU cracks under the weight of its policy on the Ukraine-Russia nub

Lack of investment and ambition means Youth Guarantee not reaching potential

Chart of the day: These are the cities where the World Cup threatens productivity the most

Trade in fake Italian goods costs economy billions of euros

At last a solid base for the European Banking Union

A young doctor from Glasgow reports: in the UK refugees are left to rot

“Airbnb and YouTube are two great examples of a crowd based capitalism”, key stakeholders outline the boundaries of the 4th Industrial Revolution in Davos

Easing funding woes for UN agency assisting Palestine refugees a ‘wise investment for today and the future’

UN Security Council welcomes results of Mali’s presidential elections

The cost of healthcare is rising in ASEAN. How can nations get the most for their money?

SMEs and micro firms sinking together with south Eurozone

Commission hardens its stance against carmakers ensuring emissions reductions targets

Syrian Refugees in Germany face distinctly different challenges than those in Lebanon

UN chief condemns attack targeting international forces in northern Mali

Access to health in the developped and developing world

COP21 Breaking News_08 December: Cities & Regions Launch Major Five-Year Vision to Take Action on Climate Change

Better protection against non-cash payment fraud

A new arrangement between Eurozone’s haves and have-nots

ECB: Reaching the limits of its mandate to revive the Eurozone economy

COP21 Breaking News_08 December: Global Business Community Comes to Paris with Solutions for Taking On the Climate Challenge Across the Board

Counting unemployment in the EU: The real rate comes to anything between 16.1% and 20.6%

Right2Water initiative: Is the Commission ready to listen to citizens?

More answers from Facebook ahead of Parliament hearing today

Happens now in Brussels: Green Week sets the EU and global climate policy agenda

China-EU Summit on 16-17 July 2018: “Work together to address common challenges”, by China’s Ambassador to the EU

EU-wide penalties for money laundering: deal with Council

Digital Single Market: New EU rules for online subscription services

The Parliament paves the way for the creation of the European Banking Union

EU Commission: Banking and energy conglomerates don’t threaten competition!

COP21 Breaking News_10 December: the final sprint of the Final Agreement Negotiations

Commission facilitates the activities of ‘merchants of labour’

EU Budgets: Europe hoping for Xmas gifts

JADE @ European Business Summit 2014: Youth Unemployment – a drive to Entrepreneurship

Sweden well ahead in digital transformation yet has more to do

Girls still being treated as aliens in medicine in the 21st century

Merkel had it her way with the refugees & immigrants but can Greece and Turkey deliver?

China Unlimited: an exclusive interview with the former Ambassador of Hungary to China

What UK and EU risk if Brexit “wins” these elections

The Fourth Industrial Revolution is changing how we grow, buy and choose what we eat

The COP22 is under full deployment while Donald Trump threatens openly to withdraw the US from the Paris agreement

India m2m + iot Forum Hosts Successful 4th Editions of India Smart Cities Forum and India Smart Villages Forum

Road to Brexit: the UK seeks early agreement on Data Privacy with the EU

EU’s unsparing question to UK: now what kind of future relations do you want?

Eurogroup president swallows statement on savings confiscation

EU-Turkey relations: Will Turkey manage to revive the EU accession process talks?

Rohingya cannot become ‘forgotten victims,’ says UN chief urging world to step up support

CHINA: five letters that could mean…

Politics needs to “Youth UP” in order the ensure the future of our democracies

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s