Article / 28 June 2016 at 10:30 GMT

Daily Shot: Braftermath Team / Saxo Bank
  • GBPUSD sinks further to multi-decade low
  • FTSE 250 index hammered by post-Brexit sentiment
  • Poland seeking second referendum for UK

By Walter Kurtz*

We begin by revisiting the situation in the UK, starting with some market developments.

1. The British pound took another hit Monday morning, reaching a multi-decade low. The currency was recovering slightly as of early Tuesday morning. We are in uncharted territory.

To put this dislocation in perspective here is Friday's GBP move compared to other markets. 

Quantifying the shock
2. The FTSE 250 index, which has less international exposure than the FTSE 100 (and thus more exposed to the UK economy), got smoked. 

FTSE 250
3. We saw a spectacular selloff in Barclays Bank shares – two days in a row of 17%-plus declines. RBS shares didn't do much better. Some view this as a buying opportunity. 

Bank shares
4. The 10-year gilts yield hit a record low falling below 1% for the first time.

Next, let's take a look at a few headlines.

1. Central bankers are nervous. 
Central bankers
2. Scotland's leadership is rather upset with the EU referendum outcome.
3. Poland is asserting itself with the EU, asking the bloc to adjust its rules with the hopes to bring the UK back under a different set of conditions.
4. S&P pulls UK's AAA rating.
— Edited by Michael McKenna

* Walter Kurtz is an alias

** This is an abridged version of the Daily Shot. To subscribe to the full version, link to the Daily Shot and select the appropriate command. E-mail addresses are never shared with anyone


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