During his trip to Scotland, Donald Trump wanted to release his first impressions about the Brexit, "appreciating" the choice made by the British people. In an interview with Italian newspaper La Stampa said that "The people in the UK have claimed their independence, the right to decide how to govern the country and determine their own destiny. It seems to me that this is a positive thing in general. The crumbling of Europe instead is a fact, not my opinion. It depends on the errors committed by its inadequate leadership.
Brexit could bring to bear its effects already on the next vacation. And for airlines, especially low-cost, the risk of burdening the next half revenues. The alarm was launched by EasyJet, which expects "that revenue per seat at constant exchange rates, in the second half of the year will fall by at least 5% compared to the second half of 2015". The British airline also said it expected a negative impact of 28 million pounds in profit before tax for the third quarter due to strikes outages, congestion Gatwick and Egyptair tragedy that has caused a decline in demand.
"Now the catastrophic scenario feared by many has materialized, making the collapse of the EU almost irreversible," - Soros wrote in a commentary published on the website of the newspaper consortium "Project Syndicate". The investor also spoke about the possible consequences exit of Britain from the EU and in relation to Friday's vote, his opinion does not require many interpretations.
While the initial effects of Brexit were clearly visible in the main financial markets, George Osborne, the British finance minister, suggests that the government will not implement the steps quickly, or that Britain will activate Article 50 of the Lisbon Treaty leave the EU when it is ready "at the appropriate time". Osborne, with the premise that the country is ready to face the turbulence caused by the decision to leave the Union, explains that "Only Britain can activate Article 50. And, in my opinion, we should not do it until we have a clear vision of the new arrangements to be introduced with our European neighbors ".
Christine Lagarde, during the forum Aspen Ideas Festival in Colorado, USA, while showing that the financial markets have "by far underestimated" the outcome of the vote in Britain, noted with respect for democracy, the outcome of the referendum last Friday. "We take note of the decision by the people of the UK and urge the British authorities and the EU to work collaboratively to ensure a smooth transition and a new economic relationship between the United Kingdom and the European Union, clarifying procedures and big goals that will drive this process. "
The markets had been anticipating a “remain” victory and the surprise effect should even amplify the impact on financial markets. The immediate effect should be extreme volatility with market dislocations due to margin call, panic selling and the search for safe haven. The UK are to enter into a two year procedure with the EU, to negotiate the exit terms. The EU will probably not make it easy in order to discourage other leavers, which promise to keep uncertainty and volatility fairly elevated at least for the next months.
We were cautious in our diversified portfolios with a reduced exposure to equities and high yield bonds. We held significant amounts of cash (over 10% on average) to stay flexible and be able to act quickly. We sold our UK exposure and hedged the GBP currency in order to preserve investors’ capital. We also hedged part of our peripheral exposure by selling futures contracts on Italian debt.
Credit Suisse expects to Britain a period of recession in the second half of 2016, significant interventions by the Bank of England and a generalized economic slowdown eurozone. The bank expects this scenario as a result of the success of Brexit in the referendum, calling it in a statement "is the most significant withdrawal from the need for integration since the Second World War. While the current output path is not yet clear, however, there are profound implications for Britain. we expect a recession in the second half of the year and monetary interventions by the Bank of England ".
"We recovered the country, this is a victory of the real people, the ordinary people, the dignified people." So Nigel Farage, leader of UKIP Independence Party Face and favorable exit of Britain from Europe, commented on the victory in the referendum on Brexit. And anticipating the next move, when reporters asked if the prime minister David Cameron should resign, he replied: "Immediately." Nigel Farage said that the referendum on Brexit there was "the victory of the common people against the big banks, big business and big politicians."
The first months of 2016 were a reminder that we are not only living in a world of low to negative interest rates. It was also a good reflection of uncertainties around global growth in general and a long list of looming event risks. The volatility witnessed during the first months of the year and the whipsawing in the valuation of risk premia is not a 2016 phenomenon: equity indices for Europe, the US or Emerging Markets unveil that high volatility and significant market swings have been with us since at least late 2014.
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