Following the UK’s decision to withdraw from the EU, markets have been thrown into a state of turmoil. At the height of this morning’s sell-off, the pound hit a 30- year low against the US dollar below 1.33, the FTSE 100 was down 8%, with a resulting flight to safety pushing yields on 10-year gilts to an all-time low of 1%. Notably, however, at the time of writing, a semblance of stability has returned with markets off their lows. Indeed, FTSE 100 has bounced back above 6000 – higher than it was at the end of last week. The bigger equity market casualties so far at least have been on the Continent – with the benchmark Euro Stoxx index currently down almost 7.5% compared with 2.5% for the FTSE 100. The Bank of England has announced that it stands ready to supply emergency liquidity if necessary.

Near term, investor sentiment is likely to remain extremely febrile with constrained liquidity in some markets possibly exacerbating volatility. Near-term focus will remain dominated by the fall out of today’s decision for the political, economic and broader EU landscape. The result of the general election in Spain on Sunday and the EU leaders’ summit on Tuesday and Wednesday offer two near-term flashpoints. If the Podemos party do well in Sunday’s election it could strengthen the calls for EU reform.

The EU leaders’ summit will now be front and centre on Tuesday and Wednesday. Beforehand the German, French and Italian leaders are scheduled to meet with EU Council President Tusk. Clearly if anything emerges from these

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