Global markets are on edge after Britain voted in favor of a Brexit from the European Union on Thursday, sending the British pound plunging to a 31 year low to 1.3395 (-9.94%) with sharp loses felt in Asian markets, Dow Jones futures dropping -631 (3.43 %), and heavy selling with the London stock market (FTSE 100) which has dropped (-8.50 %) in early trading.
— fastFT (@fastFT) June 24, 2016
Investors are fleeing to safe assets such as gold, the Japanese yen, and the U.S. 10 year Treasury whose yield dropped to 1.42 percent, the lowest level since 2012.
Gold is up +4.69 percent to 1,324.
BBC, ITV, and Sky are all projecting a win for the Leave side in the Brexit Referendum vote.
Currently, the Leave side is ahead with 52 percent to 48 percent for the Remain side with over 90 percent of the votes counted.
Britain Divided Over Brexit
The Remain side dominated in Scotland and London while the Leave side captured the majority of votes across remaining areas of England.
Britain will now be expected to submit an application to leave the European Union and spend the next two years negotiating the details of an exit from the European Union.
British PM David Cameron, who called for the referendum vote in 2013 to prove euro skeptics wrong, will be making a statement at 8:00 a.m. in London.
Leaving the EU means that Britain could lose access to the EU’s free single market which has no trade barriers and pursue new trade agreements.
Britain will also gain more control and leverage over its immigration policies.
German Foreign Minister Frank-Walter Steinmeier tweeted that it looks like a sad day for Europe.
— GermanForeignOffice (@GermanyDiplo) June 24, 2016
Marine Le Pen, the leader of France’s far-right Front National party, tweeted that she wants a similar referendum in France as concerns mount that the outcome of Britain’s Brexit referendum could ultimately motivate other euro-skeptic movements across Europe to demand similar referendums in their own countries.
Victoire de la liberté ! Comme je le demande depuis des années, il faut maintenant le même référendum en France et dans les pays de l'UE MLP
— Marine Le Pen (@MLP_officiel) June 24, 2016
The Bank of England issued a statement this morning:
“The Bank of England is monitoring developments closely. It has undertaken extensive contingency planning and is working closely with HM Treasury, other domestic authorities and overseas central banks.
The Bank of England will take all necessary steps to meet its responsibilities for monetary and financial stability.”
Written By: John Schweitzer