The US posted their Manufacturing PMI figure which was previously forecast at 50.5 but registered a positive reading of 51.4. New Home Sales declined to 551K from a previous reading of 586K.
Yesterday the markets were watching for updates on how the results would go. Furious last minute campaigning dominated the news media throughout the day, as voters were urged to make a decision on whether to leave or stay in the EU. Polling stations opened at 7am and closed at 10pm last night. Many did not sleep as news coverage continued throughout the night, eager not to miss any announcements.
The UK have voted to leave the European Union after more than four decades. The result has prompted Prime Minister David Cameron to resign and has sent shock waves around the globe. Sterling has declined to the lowest level since 1985. The final result saw the “Leave” campaign victorious by 52%, compared to 48% that voted to remain. The leave camp won by over a million votes.
The result now sets us up for years of bitter divorce talks with the EU. The UK must now count the potential economic and financial cost of an exit that Cameron warned would spark a recession. JP Morgan Chase & Co have said the BoE will likely cut interest rates to zero by August whilst the FT have stated that the UK will likely lose its AAA rating on S&P. Bank of England Governor, Mark Carney stated that the central bank will not hesitate to take additional measures.
There will continue to be immense volatility today as the news filters through the market. Following on from this, the German Ifo Business Climate reading will be released which is forecast to register at 107.6. In the afternoon, the Monthly US Core Durable Goods Orders figure will be released.