Referendum on EU UK ends with a Win leave Unleashing a reaction of Chaotic market.
The UK voters decided by a 51.9 to 48.1 percent to leave the European Union in the final result of the referendum. Financial markets were surprised that days before the camp Remain vote had made progress, but the results started coming in that the lead never materialized. The historic referendum brought to the surface the deep tensions that divided the British people and have now come to a democratic decision to recover their sovereignty by leaving the EU.
The result was an immediate impact on the global market with the markets and witness high volatility shares currencies. Central banks around the world are on alert to deal with following the results of the referendum shocking. Although she had a low probability by their own estimates all central banks build a plan B in case Brexit became a reality. The Bank of Japan has already sent plans for the expansion of swap lines to provide liquidity and keep the JPY higher as investors covet the currency as a safe haven. The Brexit vote today sees the yen back to its 2013 levels -. abenomics was cleared in less than six months
The Bank of England (BoE) and the European Central Bank (ECB) are likely to increase their easing efforts that could complicate the reserve plans Fed to raise rates later this year. Already today the CME FedWatch tool based on the Fed futures prices points to a possible rate cut as more probable that a rate hike until December. The last week of June will bring some economic indicators with the gross national product of the United States and the U.K. on the calendar. The political and economic uncertainty will dominate the markets as the pound is trading at 30 year low in the wake of the referendum results.
The GBP / USD has lost 8.157 percent in the last 24 hours. The currency pair is trading at 1.3597 after hitting a daily high of 1.5019 to 1.3229 only to fall at the height of Brexit panic. The British pound fell to 10 percent after the results started coming around the UK. fifth economy in the world held a referendum to decide the fate of its longstanding relationship with Europe and the results have a lasting effect, even if there is a way to stop the breakaway.
The EUR / USD has lost 1.687 percent in the last 24 hours. The pair is trading at 1.1161 as USD appreciated through haven flows. The EUR has not lost much ground despite the consequences that the market could be missing such an economy, but it is logical that the weight of the depreciation will be on the GBP. The dollar again a wave of monetary policy divergence, it is expected that the BoE, BoJ and the ECB will be forced to provide conventional and unconventional measures to stimulate growth and avoid falling into a recession.
The USD / JPY has lost 3.35 percent during the past 24 hours. The pair is trading at 102.20 after the breakdown of less than 100 at the beginning of the session due to following the results of the referendum in the UK the Bank of Japan (BOJ) sent proactive communications about their plans to hold the yen's appreciation. Governor Haruhiko Kuroda said the central bank is ready to provide liquidity through swap transactions to achieve market stability. The yen is seen as a safe haven and a way to hedge against the volatility of GBP and moves after the European Brexit results. The currency is back to 2013 levels could mean all the work of Kuroda and the quantitative easing money would have been for nothing.
The economic calendar will bring some answers to the main question on the minds of investors, they will have to seek advice of political leaders and monetary policies in a world where the unknowns are many more known facts . Finance Minister worldwide will comment during the weekend that could move did when the trading week begins at the Asian session open. Spanish votes will vote on repeat general election with polls showing a divided electorate.
The ECB will host its Forum on central banks in Portugal Monday, June 27. The three-day conference include ECB President Mario Draghi, Fed President Janet Yellen and BoE Governor Mark Carney. monetary policy tools unconventional and impact of Brexit are sure to be topics of discussion.
The US will release the final gross domestic product (GDP) for the first quarter. A slight improvement from an earlier estimate is expected with the US expected to grow by 1.0 percent in Q1. The UK will announce its first quarter GDP and current account Thursday, June 30. manufacturing purchasing managers index will be published in the UK and the US Friday, July 1. The week of July 4 to July 10 promises to bring fundamental back. to the forefront after a week where traders will go on limited information and the central bank and political rhetoric
market events to watch this week:
Monday, June 27
European Central Bank (ECB) Forum on central bank
Tuesday, June 28
European Council Summit to discuss Brexit
8:30 USD GDP final q / q
consumer confidence USD CB 10:00 am
Wednesday, June 29
10:30 USD crude oil inventories
Thursday, June 30
4:30 GBP current account
8:30 CAD GDP m / m
8:30 USD unemployment claims
CNY manufacturing PMI 9:00 p.m.
9:45 p.m. CNY manufacturing PMI Caixin
Friday, July 1
4:30 GBP Manufacturing PMI
10:00 USD ISM Manufacturing PMI
* All times EDT
for a complete list of scheduled events in the foreign exchange market to visit the MarketPulse economic Calendar
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