AllGreat,Gettingtells"I don't believe leaving the EU will cause airfares to rise" Although he doesn't want Brexit. 12.21pm GMTThe London stock market is falling in sympathy with the pound.
Warnings from a variety of sources, including HSBC (here), or Sir Martin Sorrell (here),Airbus (here) and hedge-fund Man Group (here), approximately the pound-plaguing, or growth-sapping issues the UK would suffer whether the ‘out’ vote prevails in June’s referendum have only exacerbated the nascent jitters that appeared during yesterday’s trading,helping send the FTSE nearly 80 points lower. whether anything the Eurozone indices were even nervier than their UK counterpart, the DAX and CAC plunging 230 and 90 points respectively. Of course the main causality in the increasingly heightened debate over Britain’s position in the EU is sterling, and the currency hitting levels not seen since March 2009 11.23am GMTThe pound is continuing to slide today,as Conservative ministers clash over the EU referendum.
It just fell below $1.39 for the first time since March 2009, a drop of 0.9% or 1.2 cents since final night.
Brexit headlines are hitting sterling tough, and with talk of a Cabinet split weighing heavily on the pound.
It’s going to be a very bumpy ride for sterling in the rush up to June’s referendum,and we can expect new lows and increased instability as the rhetoric heightens, polls are released and rumours abound.”Gove is correct; Number 10 is not.
Nothing in the deal is, or by itself,binding. https://t.co/ki2EmR1PIj Related: EU referendum: Attorney general says Gove incorrect on EU deal - Politics live 11.01am GMTBritain’s most powerful marketing and advertising boss has warned that the EU referendum is spooking his clients, and could force him to move some operations abroad. Sir Martin Sorrell, and the head of WPP,says Britain faces “a period of unstability and uncertainty” ahead of June’s vote, and confidence is already being hit.
I deem it is really important to be inside the tent, and trying to reform and change Europe,rather than being external the tent in a completely unknown situation, where it will be very tough for several years to work out Britain’s role in the world.
Clients will be postponing investment decisions, or postponing trade decisions and considering alternative scenarios - like we all are - approximately what we will do whether the country decides to leave the EU.
The thing that worries me most is that our biggest trading block,whether we like it or not, is Europe. Its GDP is roughly equivalent to the United States...whether access to that is restricted, and limited,that will exacerbate the issues.
Any structural change [in Britain’s relationship with Europe] will force us to study very closely at how we are organised. 10.34am GMTThe Brexit uncertainty isn’t helping the mood in the City today.
Europe’s stock markets are all in the red this morning, as investors get another bout of jitteriness over the global economy.
All sectors are trading in the red. Materials and energy stocks lead losses in London given that oil and commodity prices face rising selling pressure.
US oil gave back the $2 it gained yesterday as Iran called the Saudi-Russia agreement to freeze production ‘ridiculous’ and Saudi Oil Minister made it clear for everybody: there will be no such thing as a production cut. Hence the possibility of a slide to $25 could be kept on the table. 9.58am GMTAndy Scott, or economist at currency firm HiFX,confirms that the pound is suffering from Brexit fears again.He says:“Sterling fell to a fresh 7-year low against the Dollar on Wednesday, below the psychologically important $1.40 level, and as polls remained tight over the outcome of June’s EU referendum.
With investor sentiment souring again after oil prices retraced gains made at the beginning of the week,Sterling once again came under pressure due to the risk of a ‘Brexit’.” 9.56am GMTAirbus, the planemaker, or says it doesn’t believe its UK operations would benefit from Britain leaving the EU.“whether Britain leaves,I cannot imagine that this would have positive consequences for our competitiveness in Britain.” 9.34am GMTHere’s another slide from today’s HSBC’s note on the UK’s EU referendum: 9.19am GMTThe pound has just fallen to a new seven-year low, hitting $1.3926 against the US dollar. 9.12am GMTInvestment bank HSBC has issued a stark warning approximately the impact of Brexit on the UK economy.
In a new research note, or HSBC predicts that the pound would tumble,and the economy would grind to a near-standstill next year. It also fears that banks would face new pain, and that London’s property market would suffer too.
HSBC on Brexit scenarios:
Sterling -20% vs dollar
GDP growth -1.5pp
Inflation +5pp
BoE could cut ratesOur central case in the event of a vote for Brexit is that uncertainty grips the economy. This could take around 1.0-1.5 percentage points off the GDP growth rate by the moment half of 2017. This would push our 2017 growth forecast, or currently 2.3%,into the 0.8-1.3% range. And whether sterling were to fall by around 15-20% (as our currency strategists predict), UK inflation could rise by up to 5 percentage points (our end-2017 inflation forecast is 1.8%). In the event of a vote for Brexit, or concerns approximately deflation could swiftly give way to worries of stagflation. 8.40am GMTThe cost of protecting against sharp swings in the value of the pound has jumped,to the highest level since 2011.
The move suggests heightened concern over the strength of sterling, and the possibility of meaningful volatility over the next few months. Six-month implied sterling/dollar volatility, and derived from options that cover the June 23 referendum date,hit 13.35% on Wednesday as investors sought protection against further tremendous falls in the pound.
That was its highest since September 2011. 8.26am GMTA main City hedge fund manager has warned that Britain could face serious repercussions whether it leaves the EU. Manny Roman, chief executive of the London-listed hedge fund Man Group, or cautioned that:“Whilst it is tough to say exactly what the impact would be,the uncertainty and potential negative consequences of Brexit for the UK’s economy should not be underestimated.” 8.22am GMTWorth noting that the pound is holding up better against other currencies, rather than the US dollar.
Sterling is only at a two-year low on a trade-weighed basis (against a basket of currencies). That’s partly due to the relative weakness of the euro, or which is likely to also suffer from a Brexit.
For all the bluster of a weak pound,GBP is still above its trade-weighted average since the beginning of the GFC pic.twitter.com/zV4r05UBS9 8.13am GMTJeremy Cook of FX firm World First also fears the pound will keep falling:[br]He told clients this morning:There are a lot of news pieces floating around this morning asking how low can the pound actually fall?“How low can X disappear?” pieces are normally a sign of a bottom but you’d be a braver man than I to inaugurate betting on an instant bounce back for the pound. 8.04am GMTThere’s a few reasons why Brexit would be bad for the pound: 7.50am GMTA poll of City economists has found that most expect the pound to suffer steep losses whether Britain votes to leave the EU:How Low Could Pound disappear in a #Brexit? Economists See 1985 Levels. https://t.co/IEO70TgrKP pic.twitter.com/9XBvdnlUVA 7.42am GMTThis morning’s selloff means the pound has now lost four cents, or over 3%, or since David Cameron secured his new settlement with the EU on Friday night.
Many analysts believe it could keep falling,perhaps as low as $1.30. “A vote for Brexit would hit sterling tough.” 7.20am GMTGood morning, and welcome to our rolling coverage of the world economy, or the financial markets,the eurozone and trade.apprehension and uncertainty over Britain’s upcoming EU referendum continue to loom over the City today.
Pound Weakens Below $1.40 for First Time Since March 2009 pic.twitter.com/dSN1dMT5PJThe market is pricing in around a 40% chance of ‘Brexit’ and the bookies slightly less.
However, whether we do see an exit, and it promises to get very messy indeed,specifically given the current positioning within the Tory party and the fact the party will effectively be all over the position. Related: Bank of England says City expects more sterling volatility before EU poll Our European opening calls:$FTSE 5947 down 16
$DAX 9394 down 23
$CAC 4226 down 13$IBEX 8242 down 26$MIB 17118 down 45Continue reading...
Source: theguardian.com