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Brexit – The Market Reaction


The people of the UK have spoken and voted to leave the European Union. In an historic vote, the Britons turned out in droves (73% voter turn-out) and as the results we read, the markets reacted. Every major financial media outlet was broadcasting live coverage of the vote results as they streamed in overnight (morning of July 23rd). As each district reported results, major financial markets were reacting – specifically stock indexes, crude, precious metals, and certainly not least, the British Pound.


Here are the snapshots of each asset class as the referendum results began to arrive. The timeframes are approximately from the evening of June 23rd until the late morning of June 24th London Time.


GBP – Pound/Dollar



E-Mini S&P






The reaction in the subsequent days has been equally as dramatic. The major world equity markets have seen a spike in volatility and after a kneejerk reaction, many have stabilized and recovered most, if not all, of the losses since the Brexit vote.


The global financial market reaction to the Brexit vote should come as no surprise. With polling indicating a “Remain” vote in the days leading up to the decision, the “Leave” outcome sent a jolt through all asset classes as traders digested the information. We are now a few weeks removed from the Brexit vote and the global markets have had time to gather themselves as volatility has subsided. Equity markets are making fresh new all-time highs, earnings season is top-of-mind, and the July US jobs report was a massive beat; Brexit might just be another in the long line of short-term market events with little impact on long-term global economics. Time will tell.


RISK DISCLAIMER: Trading in futures products entails significant risks of loss which must be understood prior to trading and may not be appropriate for all investors. Past performance of actual trades or strategies cited herein is not necessarily indicative of future performance. The information contained herein is provided to you for information only and believed to be drawn from reliable sources but cannot be guaranteed; Phillip Capital Inc. assumes no responsibility for errors or omissions. The views and opinions expressed in this letter are those of the author and do not reflect the views of Phillip Capital Inc. or its staff.