Today I’m going to be talking about the EU referendum,I mean this is the single biggest marketing event has been on everyone’s lips it’s been on the media. it’s just been everywhere for for the past couple of months now so you know I think as traders it’s very important that we break this down and we look at how the EU referendum is going to affect financial markets now always as usual must tell you guys that this is not advise to trade any particular instruments you know this is purely an impartial look on the reasons of the referendum and how and why that may affect financial markets.
First of all the referendum why it matters to traders? Analysts have for some time been flagging the referendum as one of the key risks that are facing financial markets in 2016. you know polls have narrowed quite a lot recently which is added to the concerns over a potential breaks it. there was a particular public came out from you got my belief that were showing a 80% to 20% favor of staying in the EU. now the pound it tumbled to a seven-year low once the referendum was announced global traders took a dim view of a prospective departure from the EU and
let’s face it more volatility is expected as the referendum approaches , I mean we saw sterling for example dropping down all the way to us 138 and then rebounding all the way to 143 within a very short amount of time.
So you know I think the volatility that this referendum is causing all this uncertainty is causing this is fantastic for traders because that’s like to trade is one positivity right simple as that now the UK government which is fearful of financial implications of the brakes as demanded the bank’s you know which make the market government bonds or kills a bit of these for at least five percent of each issue which is up for the super said previously so i think that is also very interesting as well as something you know FOREX traders need to look at as well as the fact that its first government bonds or guilt serve actually increased by 3% since the referendum started a referendum talk started
Now the implications UK businesses are also potentially enormous you know and the data suggests that we’ve seen recently the investment decisions are being delayed ahead of the fire and I think that’s pretty understandable considering the uncertainty of weather no we’re going to be part of the EU or not I think that’s very wise of most businesses to to delay those investment decisions and also think we’ve got to look at the volatility now this could present unique opportunities for traders. and you know let’s not forget stocks , stocks are always going to be in focus and the 40 – 50 is going to be more susceptible to the risk of the brakes it simply because companies in the mid-cap index tend to be European urban to tend to be more year of dependent those in the foot c100 you don’t put c100 big multinational companies do all over the world but the cyclical stocks in the 250 predominant their businesses you’re bound so you know it could be an interesting part of the economy to look at in the lead actor so this referendum you know individual stocks that make most of their revenues outside of the UK the EU are actually seen as better shielded from such an event i think is pretty self side self-explanatory.
World equity markets soared this morning after weekend polls suggested that Britain was more likely to vote to remain in the EU.Both sides of the referendum campaign last week after a member of parliament who had supported voting to stay in Europe was killed canceled. Pause to invest the time to weigh the fundamental outlook for emerging market assets beyond next week’s events.
The markets should fare relatively better for the rest of the year as valuations have improved after recent losses and there is some stability in the growth outlook as well as oil prices,” William Jackson, a London based EM analyst at Capital Economics Ltd, said.
This week’s activities have resumed, but Bob still relatively low. To date, investors continue to move their capital from the market of Great Britain, fearing the worst, but the latest change to the “remains vote gives hope. However, we can expect the downtrend to resume as the referendum UK draws near.