Sterling, stocks take another Brexit hit as spooked investors seek safety – by Eddie van der Walt and Marianna Aragao (Financial Post – June 27, 2016)

http://business.financialpost.com/

More than $4 trillion has been was wiped from global equity values
as internecine squabbles flared in the U.K.’s main political parties,
exacerbating the sense of instability.

Bloomberg News – The aftershocks of the U.K.’s vote to leave the European Union reverberated across financial markets after a weekend of political turmoil, with the pound extending its record selloff and European equities dropping to levels last seen in February.

The S&P 500 sank 1.7 per cent to the lowest since mid-March, while Europe’s equity benchmark slid 3.2 per cent as bank shares tumbled, weighed down by upheaval within Britain’s two major political parties even before exit negotiations begin. Sterling fell below Friday’s lows with a 3.6 per cent slide to the weakest since 1985. Demand for haven assets boosted gold, while Treasury 10-year yields approached an almost four-year low.

In Canada, the TSX was down 277 at 13,616. Risk assets have been under pressure since Britons voted to secede from the EU, raising concerns that an already-fragile global economic recovery will falter as trade snarls in one of the world’s biggest consumer blocs. More than $4 trillion has been was wiped from global equity values as internecine squabbles flared in the U.K.’s main political parties, exacerbating the sense of instability.

“This is the new normal — politics could add more volatility to all financial assets,” said Barbara Reinhard, head of asset allocation for multi-asset strategies at Voya Investment Management, which manages $213 billion. “This is in part because central banks have done the lion’s share of lifting for stimulus.”

The next days and weeks will be key for central banks as they seek to limit volatility in financial markets. The European Central Bank is hosting a three-day meeting in Portugal that will include speeches from its president, Mario Draghi, and Federal Reserve Chair Janet Yellen. German Chancellor Angela Merkel will host EU President Donald Tusk in Berlin on Monday to talk about the U.K.’s plan to exit the bloc. Cameron is due to address British lawmakers.

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