MILAN
NEW YORK
Even diplomacy has its importance: Janet Yellen said yesterday that he can not take “a position for or against Brexit “but he clarified in subsequent statements that, in her opinion, an output of Britain by the European Union will have negative consequences in the short and potentially very worrying the markets. Therefore, he said, one prepares elaborate: “I do not want to give the impression of exaggerating, but we are ready to follow the outcome of the vote with great care and to handle any situation because whatever the outcome will be, there will be economic consequences.” It seems an agreed statement with those of Mario Draghi, again yesterday and always alarmist. Attention in both cases this is not just a psychological game to scare the British electorate or a superstitious attitude.
The danger of an exit is concrete and therefore the concerns for investors’ reactions are real. It is taken for granted that a financial instability due to Brexit, as it has always reported Yellen speaking in front of the Finance Commission of the Senate, could trigger a wave of sales, in a flight to quality investments (German Bunds) type with a direct impact on relations and on international currency economies such as China held that “still suffers from imbalances”. Indeed, there is a substantial “global” in the impact of the United Kingdom output by the EU: “If Britain will be released by the European Union will point the market to minimize the risk. You will see flights to quality that could strengthen the dollar and other so-called solid currencies … however I do not expect a negative result of Brexit can induce in the medium term a recession in America. ” The US economy remains weak; be added that multilateralism will be even more under attack, because one thing is the generalized protest that produces, even in America, someone like Trump, another is a taking away of formal, with a vote that could establish a historical output . All this also, as we said, comes at a sensitive time for the US economy, with growth slowing, with productivity rates in crisis and with a given on training new employees hired worrying: only 38,000 in the month of in May compared with more than 160,000 expected. Numbers that could result in a further narrow slip of the announced interest rate.
Mario Draghi and Janet Yellen gave a clear warning about possible risks related to Brexit. However, the market continues to prevail for some optimism about it. After Monday’s rally (+ 3.3% the average performance of European indices) who expected a physiological setback related to profit-taking had to think again because in Europe the main stock market indices closed the day positively with Milan rising 0.45%, Paris 0.61%, Frankfurt dell0 0.54%, Madrid 0.23% and London 0.36 percent. If last week was especially risk aversion prevails among investors today the climate is very different. The change of pace we have seen after the assassination of the leader of the Parliamentary Labour Party and faced “Remain” Jo Cox last Thursday. A dramatic event of which the markets have cynically gambled in the belief that this event will enhance your chances of winning the “Leave.” The flight capital from the United Kingdom (last week equity funds Uk posted second-largest weekly outflow of all time: 1.1 billion dollars) seem to be back to judge by the sterling performance, from the lows of the day ‘assassination ($ 1.4149) to day highs reached yesterday (over 1.47 share on maximum of six months) has gained more than 5 percent. So much for the currency market. Thursday we will see if it is a fair bet or not.
On the horizon looms the meantime another electoral test, in these days overshadowed by the theme “Brexit” but by the implications still relevant: the election policies in Spain on Sunday, 26. “With the debate over the UK staying in the EU, which has already put enough into question the project of European integration does not feel the need for new political uncertainties,” writes in a note Jan von Gerich , chief strategist at Nordea, referring to the risk of a statement of Podemos, the anti-led training system by Pablo Iglesias.
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