Daily Market Report 27/06/16

GBP

After the UK historically voted to leave Eurozone on Friday the British public and wider economy face further uncertainty as both Major parties  plunge into leadership turmoil. Both the Torries and labour are in open conflict on Sunday after a vote to leave the EU triggered an attempted "coup" in the main opposition Labour Party and a bitter leadership contest in the ruling Conservatives.

Prime Minister David Cameron has said he will resign prompting a fierce battle to replace him and several Labour lawmakers quit the party's top policy team to try to force their leader, Jeremy Corbyn, from office. 

The Labour leader, who was left reeling after his decision to sack the shadow foreign secretary, Hilary Benn, was followed by the resignations of 11 senior shadow cabinet members. Former London mayor Boris Johnson, whose support for the leave camp galvanized the "Out" campaign, is favourite to replace Cameron but media have reported that there is a group of pro-Cameron lawmakers looking for "anyone but Boris".

Meanwhile scotland's parliament would consider blocking legislation on Britain's exit from the European Union if that were necessary to protect Scottish interests, First Minister Nicola Sturgeon said on Sunday.
Scotland, voted to stay in the EU by 62 to 38 percent in a referendum on Thursday, putting it at odds with the United Kingdom as a whole, Sturgeon, leader of a party that wants Scotland to become independent of the UK while remaining in the EU, has repeatedly said since the referendum result was announced on Friday that she would take whatever steps were necessary to ensure that Scotland's democratic will was respected.

Earlier on Friday  Bank of England governor Mark Carney sought to calm financial market fears about the impact of the UK’s Brexit vote by insisting that they will take any measures needed to secure economic and financial stability. Many analysts believe the Bank to boost the economy by cutting interest rates or  embark on a further programme of  quantitative easing, but Carney made it clear that the BoE would not be rushed into decisions by the shock nature of the referendum result.

EUR

Europe’s leaders are divided over how to negotiate Brexit and Britain apparently reluctant to initiate formal talks on leaving. Finland’s former prime minister Alexander Stubb said the EU should not push Britain too fast into launching a formal exit procedure. “This will be an extremely complicated set of negotiations,” he said. However other European countries are pushing for a rapid exit. The foreign ministers of the EU’s six founding members want Britain to start proceedings “as soon as possible” to avoid a long and potentially damaging period of uncertainty for the already weakened bloc.

Prominent leave supporters including Boris Johnson have said they want to open informal negotiations first in order to avoid locking Britain into the strict two-year time frame within which article 50 negotiations must be concluded. If the EU refuse informal negotiations until article 50 is enacted it could pose significant problems for the leave campaigns “Brexit” strategy causing further political and economic uncertainty.  

Key Announcements

EUR - 18:30 :ECB President Mario Draghi speaks