Sterling, Euro, stocks sink as UK votes for EU exit

Share:
Sample polymer ten GB pound banknotes are seen on display at the Bank of England in London September 10, 2013. REUTERS/Chris Ratcliffe
Sample polymer ten GB pound banknotes are seen on display at the Bank of England in London September 10, 2013. REUTERS/Chris Ratcliffe

Carnage came to global markets on Friday as results of an historic referendum showed Britain had voted to leave the European Union, sending sterling on a record plunge and pummelling equities across the world.

Such a body blow to global confidence could well prevent the Federal Reserve from raising interest rates as planned this year, and might even provoke a new round of emergency policy easing from all the major central banks.

Risk assets were scorched as investors fled to the traditional safe-harbors of top-rated government debt, Japanese yen and gold.

Billions were wiped from share values as FTSE futures fell 7 percent FFIc1, EMINI S&P 500 futures ESc1 5 percent and Japan’s Nikkei .N225 7.6 percent. European stock markets were set to up 6-7.5 percent lower.

The British pound collapsed no less than 18 U.S. cents, easily the biggest fall in living memory, to hit its lowest since 1985. The euro in turn slid 3.1 percent to $1.1022 EUR= as investors feared for its very future.

Nearly complete results showed a 51.8/48.2 percent split for leaving, setting the UK on an uncertain path and dealing the largest setback to European efforts to forge greater unity since World War Two.

Sterling sank a staggering 10.1 percent to $1.3387 GBP=, having carved out a range of $1.3228 to $1.5022. The fall was even larger than during the global financial crisis and the currency was moving two or three cents in the blink of an eye.

“It’s back to the future, we’re back to where we were in 1985,” said Nick Parsons, co-head of global currency strategy at NAB in London.

“We’ve had a 10 percent decline in six hours. That’s simply extraordinary, and a vote to leave provides an existential crisis for Europe.”

The shockwaves affected all asset classes and regions.

The safe-haven yen sprang higher to stand at 101.34 per dollar JPY=, having been as low as 106.81 at one stage. The dollar decline of 4 percent was the largest since 1998.

That prompted warnings from Japanese officials that excessive forex moves were undesirable. Indeed, traders were wary in case global central banks chose to step in to calm the volatility.

Bank of Japan Governor Haruhiko Kuroda said the bank was ready to provide liquidity if needed to ensure market stability and a source said the Bank of England was in touch with other major central banks ahead of the market open there.

Other currencies across Asia suffered badly on worries that alarmed investors could pull funds out of emerging markets.

RECESSION FEARS

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slid almost 5 percent, while Shanghai stocks .SSEC lost 1.1 percent.

Financial markets have been racked for months by worries about what Brexit, or a British exit from the European Union, would mean for Europe’s stability.

“Obviously, there will be a large spill over effects across all global economies if the “Leave” vote wins. Not only will the UK go into recession, Europe will follow suit,” was the gloomy prediction of Matt Sherwood, head of investment strategy at fund manager Perpetual in Sydney.

Investors duly stampeded to sovereign bonds, with U.S. 10-year Treasury futures TYc1 jumping over 2 points in an extremely rare move for Asian hours.

Yields on the cash note US10YT=RR fell 24 basis points to 1.49 percent, the steepest one-day drop since 2009 and the lowest yield since 2012.

The rally did not extend to UK bonds, however, as ratings agency Standard and Poor’s has warned it would likely downgrade the country’s triple A rating if it left the EU.

Yields on 10-year gilts were indicated up 20 basis points at around 1.57 percent GB10YT=TWEB, meaning higher borrowing costs for a UK government already struggling with a large budget deficit.

Across the Atlantic, investors were pricing in even less chance of another hike in U.S. interest rates given the Federal Reserve had cited a British exit from the EU as one reason to be cautious on tightening.

“It adds weight to the camp that the Fed would be on hold. A July (hike) is definitely off the table,” Mike Baele, managing director with the private client reserve group at U.S. Bank in Portland, Oregon.

Fed funds futures <0#FF:> were even toying with the chance that the next move could be a cut in U.S. rates.

Commodities likewise swung lower as a Brexit would be seen as a major threat to global growth. U.S. crude CLc1 shed $3.00 to $47.11 a barrel in erratic trade while Brent LCOc1 fell 6 percent to $47.83.

Industrial metal copper CMCU3 sank 3 percent but gold XAU= galloped more than 8 percent higher thanks to its perceived safe haven status.

REUTERS.UK.Euro

Share:

Comments

61 responses to “Sterling, Euro, stocks sink as UK votes for EU exit”

  1. MekensehParty Avatar
    MekensehParty

    That’s why Soros, the biggest expert on the British pound bought millions if not billions in gold 3-4 weeks ago
    and that’s why I did the same (with a much lower amount of course)
    ding ding ding
    VIva Brexit
    Watch for China next

    1. 5thDrawer Avatar
      5thDrawer

      Well, we all knew the ‘Money-Men’ were going to punish free-thinkers. 😉

      1. MekensehParty Avatar
        MekensehParty

        It’s more of a self-inflicted punishment, something stupid people are very good at.
        People keep thinking that they can beat the rich, often forgetting that the rich is rich because he’s more clever than the poor. And when they pull up a scheme like Brexit to get back at the rich, they don’t understand that the rich, being more clever than them is already one step ahead betting on the effects of the scheme and making a load of money out of their stupidity.
        The UK will break apart, Scotland will revive its independence dream especially now that the main reason that kept them in (being part of the EU) is no longer valid. Northern Ireland is now desperate as it cant access the Irish market as freely as it used to, nor the EU market. The isolationist of the UK are now going to pay more for imports, find it harder to export. They’re going to loose jobs they were able to access in Europe. They will loose the cheap labor they were able to get, driving prices up locally and the poor will get poorer while the rich is hardly going to feel the difference.
        The solution: work to be rich, not to beat the rich
        Ask Marx and Lenin, what happened to their moronic scheme?

        1. Hind Abyad Avatar
          Hind Abyad

          You admire Soros? “The rich is more clever than the poor”, that’s fascist.
          Special club group of parasites playing chest with the World, who live on War blood weapons stealing other countries natural resources –
          no morals nor principles – destroying entire countries, creating terrorism millions of refugees, such creative smartness.
          Monsanto is also “smart”.

          1. MekensehParty Avatar
            MekensehParty

            Hind, look up words before using them for Christ sake

          2. Hind Abyad Avatar
            Hind Abyad

            OK..but..euh..some were less clever.
            “The World’s Wealthiest People Hit Hard In Wake Of Brexit”
            http://www.forbes.com/sites/derekxiao/2016/06/24/worlds-wealthiest-hit-hard-in-wake-of-brexit/#6b9a8846538a

          3. 5thDrawer Avatar
            5thDrawer

            Not reading Forbes .. Sounds like a way to make the poor ‘feel’ better if ‘the 1%’ hurt a little. And Mek’s line, which is a good advice – “work to be rich, not to beat the rich” – also leaves out those who really cannot work – for one reason or another.
            Yet he has a point … the food will still be on the table of the ‘rich man’, who hasn’t jumped out a window in his ‘great angst’ at possibly facing a lesser life-style.

          4. MekensehParty Avatar
            MekensehParty

            I’m not saying that those who really cannot work should be left on the street to starve. Not at all, I always said that society is not the jungle, that hard working people should give to those who truly cannot work and cannot earn for valid reasons. Handicapped, sick and old people should be cared for, it is our responsibility as a human society to care for them. This is NOT Sparta (or later the Reich). But I was always against handouts to people who can work and earn but are lazy and would rather count on the generosity of the hard worker. Most rich people are actually very generous, and I am proud to see in my days that the two richest man on the planet, Gates and Buffet, pledged to give away 90% of their fortune to… new and promising ideas. These two have changed the preconception that rich means immediately bad, or that rich people are thieves, which they’re not – at least most of them. They are geniuses who saw and invented things that helped the world make giant steps ahead and they deserve our respect and furthermore our gratitude. Let’s remember that we are all typing on a keyboard thanks to Gates, and that Buffet helped thousands if not millions of people getting rich through companies and jobs he created. (Soros by the way is an ultra-leftist with ideas and values that are closer to Marx’s… not at all the guy described above by an “inculte”).
            In the very Bible, the story of the master and his 3 servants (modern church translation of slaves). The master gives each 1 gold coin, one spends it on whisky and tails, one hides it and returns it as is, and one invests it in Microsoft stock and makes another coin… Who was the master/god’s favorite? The clever capitalist 😉

          5. Hind Abyad Avatar
            Hind Abyad

            “(Soros by the way is an ultra-leftist with ideas and values that are closer to Marx’s… not at all the guy described above by an “inculte”)”.

            DIRECTOR OF ORG FUNDED BY NAZI COLLABORATOR TO HEAD ADL
            ttp://www.frontpagemag.com/point/244715/director-org-funded-nazi-collaborator-head-adl-daniel-greenfield

          6. MekensehParty Avatar
            MekensehParty

            Hind stop pulling articles written by morons. There are credible writers and there are nobodies. It’s not because it’s on the internet that it’s true or that it’s credible. Soros is a well known leftist and whatever “frontpagemag” says is not going to change this known and proclaimed fact.

          7. “Hind stop pulling articles written by morons.”
            What would she do then? Collecting unemployment checks is not a full-time job. 🙂

          8. Hind Abyad Avatar
            Hind Abyad

            What about his history, at age 16 he was collaborating with Nazis. according to himself. Have you read his interviews?

          9. Rudy1947 Avatar
            Rudy1947

            The war was over when Soros was 16.

          10. She gets her hatred for Soros from Assadite-Putinoid talking points. He’s an integral part of the Jewish world domination plot which is at the core of the Arab belief system.

          11. Hind Abyad Avatar
            Hind Abyad

            @ YoYoKrap

            ONE EVIL MAN SOROS BY: STEVE KROFT 60 MINUTE 4 YEARS OF RESEARCH

            http://itmakessenseblog.com/2011/04/28/one-evil-man-soros-by-steve-kroft-60-minute-4-years-of-research/

          12. Hind Abyad Avatar
            Hind Abyad

            He was 16 and with help of Nazi he robbed Jewish abandoned properties..senile.

          13. Hind Abyad Avatar
            Hind Abyad

            If it’s not Your opinion it’s moron, YK favorite

          14. Hind Abyad Avatar
            Hind Abyad

            I do

          15. Dunno why you felt the need to bring Christ into the picture. 🙂

          16. MekensehParty Avatar
            MekensehParty

            I love Christ but not a big fan of Christianity 😉

          17. Never met the guy, but I’ll take your word for it. 🙂
            As to Christianity, I personally tend to distinguish between Christians and “Christians”.

          18. MekensehParty Avatar
            MekensehParty

            Well it’s pretty rare to find a Jew preaching about love lololololol

          19. Not a big expert on the Jews, mate. As to “love”, I’ve always preferred the practical aspect of it to “preaching”, if you catch my drift. 🙂

          20. MekensehParty Avatar
            MekensehParty

            Chances are he never preached that much about love, practical or platonic, 2k years later is plenty of time to re-translate things the way you want. You gotta give it to the guy though, intentionally or not (probably not) he carved his name in History and not on the Sith side, and that’s quite an achievement. [If hind would just stop liking my comments, driving me insane]

          21. I gave you an upvote, mate. Maybe that will scare her away :-).

          22. MekensehParty Avatar
            MekensehParty

            PS: never thought you were Jewsih or even cared 😉
            Was just a general joke

          23. Omega Avatar

            You admire Soros?

            Did you expect anything less from this self-proclaimed martyr who’s ashamed to be Lebanese and who bends over to the warmongering USA?

          24. Rudy1947 Avatar
            Rudy1947

            And who do you bend over for, other than yourself?

          25. Omega Avatar

            other than yourself?

            Right.

          26. Rudy1947 Avatar
            Rudy1947

            Kinky. It’s your life.

          27. Omega Avatar

            Right. Turn it on me, senile creep.

          28. Rudy1947 Avatar
            Rudy1947

            You’re own your own boy, I’m sure you’ll get it right.

          29. Omega Avatar

            Right.

          30. Rudy1947 Avatar
            Rudy1947

            “The rich is more clever than the poor”, that’s fascist. ”

            That’s life sweetheart, that’s just life.

          31. Hind Abyad Avatar
            Hind Abyad

            No that’s not life that’s parasites existentialism..mini mouse
            Where did i say ‘the rich are more clever than the poor’, needle brain?
            I was replying to Mekenseh, you suffer from attention deficiency..so stupid

        2. DaveTheRave Avatar
          DaveTheRave

          I believe the Marxist/Leninist moronic scheme has morphed into the
          modern EU. 300 plus years of National Parliamentary Democracy in the UK
          was being slowly eroded over the past 43 years for the sake of an
          exclusive trade club that tramples on the idea of national identity and
          sovereign government. Thanks but no thanks. I almost wept when the
          Greeks at their referendum decided to take the bribes at the cost of more poverty and chaos.
          So glad my countrymen and women have had the fortitude to reject this
          charade. Vive la revolution.

          1. MekensehParty Avatar
            MekensehParty

            There are good and bad arguments on both sides, I won’t deny this.
            Yes, the EU is far from perfect, and yes, the EU’s (partially unelected) parliament is a mess with great power and little accountability, but how different is it from the UK parliament and all political institutions around the world? If the UK, or should we start calling it the 2K (kingdoms of England and Wales as Scotland and Ireland go independent), so if the 2K are going at it alone to do better, fine, but if the same old corrupt politicians advancing resonant speeches rather than progressive policies – which they very much sound like – and take the 2K backwards, this referendum will be a historic failure on all levels.

          2. “For Collaborating With Nazis During WWII to Send His Fellow Jews to the Death Camps”
            Is that a bad thing or a good thing? With you and your Fellow Dregs of Humanity(tm) one never knows. 🙂

          3. Hind Abyad Avatar
            Hind Abyad

            Sad life coming here just for mes spying on any blogger i discuss with, don’t you have a life in society?

            I mention the sorry Soros, who says he feels no remorse for Collaborating With Nazis During WWII to Send His Fellow Jews to the Death Camps, Steal Their Property.By collaborating with the Nazis, George survived the Holocaust. He turned on other Jews to spare himself.

            “How Soros feel about what he did as a teenager? Has it kept him up at night? Steve Kroft of 60 Minutes asked him that. Was it difficult? “Not at all,” Soros answered.

            “No feeling of guilt?” asked Kroft. “No,” said Soros. “There was no sense that I shouldn’t be there. If I wasn’t doing it, somebody else would be taking it away anyhow. Whether I was there or not. So I had no sense of guilt.”
            So intelligent

          4. Yep, my dear Queen of Idiocy, you caught me. I only come here for you and your degenerate friends. 🙂

          5. Hind Abyad Avatar
            Hind Abyad

            King of Zombies, you and zombies friends only come here to promote Zionist soulless mind-dnumbing life on earth

          6. (Pathetic) atempt at sarcasm detected. If only you knew English (and had an IQ above 85) – you could have probably succeeded. 🙂

          7. Hind Abyad Avatar
            Hind Abyad

            No sarcasm :))) I express myself in a foreign language.
            Worry about your perfect empty messages; clichés of IQ’s which you know nothing about is sign of your mediocre IQ.

          8. Omega Avatar

            Soros is a CIA agent who fund colors revolutions. Bent-overs like Mekenseh don’t care as long as they can make a buck with them.

          9. DaveTheRave Avatar
            DaveTheRave

            Sorry for late reply. Have been elsewhere.
            The argument you advocate in your reply boils down essentially to a choice between the lesser of two evils.
            The Devil or the deep blue sea.
            The story of the old English King Canute (or Cnut (nice anagram)) showed
            that you can’t stop the tide but you can change your beliefs.
            There are forces at work in the EU that seek a further political integration
            of it’s members into the creation of a federal superstate replete with
            it’s own standing army.
            This is a very dangerous idea. (Historically espoused by both Napoleon and Hitler)
            The idea of sovereign nationhood is anathema to this vision of the federalists hence the furore and backbiting over the decision to leave by the UK referendum.
            It was a tough choice but I earnestly believe it was a correct one. There are no real checks and balances in the slow moving bureaucratic nature of the EU constitution. Instead economic hegemony holds sway at the expense of poorer members and even the poorer citizens of the richer states.
            The Westminster system isn’t perfect either but it has a greater degree of accountability and for that reason I again state that I believe this was a good choice and ultimately
            democracy itself has restored real democracy back to the UK.

            Thanks for the reply.

          10. MekensehParty Avatar
            MekensehParty

            I can’t agree more, and certainly understand the frustration against a bureaucratic Europe which I personally constantly criticize. There is a ton of problems and you named but the major ones. But then again, the word “divorce” kept coming in the news, and for good reasons. It’s a matter of unity and in all such cases the couple needs to sacrifice a lot, work on their problem, solve some, leave some for later, fight again, resolve some and keep more for later… All in the name of preserving unity. Or one can say screw it, I’m getting a divorce… Which is a temporary solution before you screw up again and get remarried 🙂
            The US has the same problems, some states are extremely poor and lazy, sucking the federal money, others are super productive and yes, every now and then you hear people in them calling for a “divorce”. But the majority, and thanks indeed to a better system, are sticking together because without a doubt it makes the whole country and each individual state stronger.
            I think the UK took the easy way out, led by loud leaders of the leave camp who concentrated on and exaggerated the negatives and made their compelling arguments be heard, but they didn’t talk enough and have sometime hidden the true and long term benefits of the Union. They themselves were surprised of winning the day and now are backtracking because they have no clue how to move forward.
            Democracy has spoken and I respect the choices of the locals, as an outside observer, who benefits greatly from a federation (I live in a very strong and productive state), I can’t repeat enough that the model of unity can work, and I wish that Europe reaches it one day.

    2. Omega Avatar

      and that’s why I did the same (with a much lower amount of course)

      $100?

      1. MekensehParty Avatar
        MekensehParty

        That’s how much you’re paid by the Iranians

        1. Nobody would pay this moron a single dime. Not even Ahmadinejad’s lowliest minions.

        2. Omega Avatar

          Unlike you, I can’t be bought.

          1. MekensehParty Avatar
            MekensehParty

            wow, nice comeback
            in Tehran or Dahyeh such come back will make you a hero among the basij

          2. Omega Avatar

            I am neither from Tehran nor Dahyeh; try harder.

            You did just write: repeating them over and over doesn’t make them true – didn’t you?

  2. 5thDrawer Avatar
    5thDrawer

    I remember 1985 as being a very good year … seems to have gone downhill for humans here since 1990.
    Maybe that’s what the Brits remember too.

    1. Old farts always pine for the good old days when the booze was strong and the dick was still usable. 🙂
      I guess 1985 was an especially good year for Lebanon. 🙂

  3. Hind Abyad Avatar
    Hind Abyad

    ‘The White House and NATO prepare the sabotage of Brexit.’
    http://www.voltairenet.org/article192532.html

    1. Oh Yaeh Avatar

      You really love all the left-wing ‘news feeds’…..

      1. I wouldn’t call her belief system left-wing. She’s an obvious case of what the Germans call the “rinks-lechts” syndrome.

          1. Hind Abyad Avatar
            Hind Abyad

            Ex-Matrix, ex-Intouchable, ex-Renee Descartes..(Wilhem) Oh Yaeh and Yoyoya (Guest)

Leave a Reply

Your email address will not be published. Required fields are marked *