Now that Britain has officially voted to leave the eurozone, central banks are left to decide what (if anything) they will need to do to stabilize global markets. Several Wall Street analysts have already given their takes on the issue.
Capital Economics believes the rhetoric about the dangers of a Brexit coming from most central banks in recent months in an effort to discourage voters will immediately die down. “This should help calm nerves and, even if it doesn’t, policy support by developed world central banks should ultimately help to contain the financial fallout,” the firm’s note read.
Berenberg Chief Economist Holger Schmieding believes central banks will offer any liquidity that is needed to cover for short-term market shortages in the wake of the vote. “That the European Central Bank is buying sovereign and corporate bonds worth €80bn per month anyway limits the risk of a dramatic blowout in yield spreads as markets ratchet into risk-off mode,” Schmieding explained.
Capital Markets’ Charlie McElligott sees “govts intervening in FX mkts real-time, esp the Swiss National Bank and EM’s (South Korea, India and likely Singapore already), with risk of BoJ soon.” While McElligott believes an interest rate cut by the Bank of England is imminent, the U.S. Federal Reserve has its hands tied because the Brexit is not a local issue.
Finally, HSBC analyst Murat Ulgen said…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
