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Monday 27 June 2016

What after Brexit? (Part 2)

The consequences for the fundament

In Moody's said that Brexit will reduce US GDP by 0.1%.
The probability of increasing the interest rates by the Fed significantly reduced: 0% in July, 25% in December. It is worth noting such subtlety - Janet Yellen on Tuesday, June 21, was very careful in her speech before Congress, which gives reason to believe - after Brexit Fed altogether may refuse further rate hikes this year.
The probability of reducing Australia's interest rate is 50%.
The Bank of England will probably go on and should further with softening of the economy: lower rates, the increase in the money supply.
Political News will dazzle, as begins the long process of negotiations between EU and Britain, which likely will start only after replacing Cameron (in October, he will be out of duty). EU zone will be under constant pressure of political and economic uncertainty in the next couple of months.
The Swiss bank will continue to intervene in the currency market.
UK labor market will fall. Key global banks have already announced a smooth transfer of the headquarters to other European countries (talking about J.P.Morgan, HSBC, Deutsche Bank).
Scotland said that their destiny is tied up with the EU for which they voted (62% of the stay in the EU) - and they threaten to prepare a new referendum on the exit from the UK. With the same mood stays also the Northern Ireland.

What does Brexit mean to for the news trade?

Reaction of the central banks will follow, which opens up additional prospects - to the trade on the news actively will connect two indicators: the interest rates and quantitative easing program.


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