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What do people think is going to happen post Brexit vote?


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I have a firm view that Brexit Remain vote will not change the fundamental picture in the financial markets or the wider global economy but may be a temporary catalyst for US large cap stock markets to make new all time highs (probably not the other markets thought, which will make strong retraces instead).  After that the end of the Bull market must surely come in.

 

On Commodities I think this scenario results in the end of the current retrace and a turn into a final move down to the bottom.

 

On FX I expect a fall off in DX corresponding to a surge in the Euro and GBP, with USDJPY completing the current move down as previously discussed and then USD goes on a large rally against all currencies, probably coinciding with a turn off the Stock markets all time highs.  Additionally I see an initial Euro relief rally against GBP followed by a strong Euro fall as the reaoity of the Eurozone economy and the precarious nature of the EU post Brexit vote hits home. 

 

I believe we will see a narrow Remain result, which will be too narrow to kill the issue (just like with the Scottish independence vote) and then we will see whether the Eurocrats are serious about real reform, which they are not and when people see that the issue will raise it head again, perhaps in somewhere like France with the people, emboldened by a close UK result, calling for their own referendum.  Surveys show the French people are more disenchanted with the EU than the Brits!  That one would probably go in the favour of exit and then the cats is truly among the pigeons...

 

Anyone else got a view?

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Hy Mercury, if their was a remain vote, which looks like the markets are pricing that in already, it will most likely be a very narrow result, of which then without a shed of doubt their will be some turmoil in the conservative party. However in terms of reform in Europe, that to me seems more a joke and a dream and not to be taken seriously. If their was a remain, I don't think we are going to see a rally in indices or currencies as much as institutions are making out, simply due to uncertainty in the Eurozone and the US. Overall I still see USD-JPY falling lower, and GBP against the EURO to still fall regardless of the vote. The irony of course, is that Scotland is without a shed of doubt going to bring up the subject of the referendum for independence, if we vote leave, then I think to the contrary, regardless of what the SNP state.

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It has been a very long time since I have seen such volatility in the market, and after staying up most of the night, we have seen interesting moves all across the board, however, it does seem that GBP-USD has slowed down, USD -JPY did go below 100Y, but soon went above 101 again, BOJ to make a press conference this morning. Now that we have left the EU, many of us have been saying, how Europe as a whole is standing up to the establishment, hence why I now would not doubt a win vote for Donald Trump in America. I do think now that the UK and the EU will no doubt will try to reassure the markets ASAP, and central bank chiefs will without doubt make statements sooner or later.

Overall a good victory for democracy, however as traders, this is going to require re-assessment across many major indices, commodities and currencies.

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Reassessment  is needed on a continuous basis but this time it will take some time for the dust to settle.  Trading any time soon is a gamble in my view.  Logic would say that there will be a large reaction retrace but these times are not logical.

 

Longer term I think this may be the pin the pricks the bubbles but it will doubtless take a while for that to become apparent sufficiently to trade it.  The strange thing is that the markets are all going the way many of us have forecast long term, just happened over night, that is the crazy part.  One or two need another look (EURGBP for instance) now that is an overreaction.  The Euro FFX crosses may well be a decent trade soon as people wake up to what will not happen in the Eurozone.

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Hy Mercury, although many have now suggested we could still see further falls in the pound, I myself a little sceptical about that. We have to start looking into the past and make some similar comparisons and therefore reach a logical conclusion, even though the markets are from logical right now. My View is that the euro dollar is the one that could take a pounding, as the rise in euroscepticism starts to unfold and therefore greater uncertainty in the Eurozone. Of course a credit downgrade could add to the increasing pressure on the pound itself, but that remains to be seen. The facts are we are not in a recession, the BOE has not intervened as of yet, and if you look at past history with the ERM, we all know that was not the most greatest of ideas even then. From a technical analysis view, looking at EUR-GBP, I do think we may have almost completed W5, therefore, unless it penetrates that tramline, I do think we may gain some strength. Let me know of course if you have a different view of this.

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