Last week saw markets continue to rally as investors attempt to take on board the UK referendum decision. In the UK, this has been taken in some quarters to mean that the consequences of Brexit will not be as dire as some economists think, but they are mistaken. Nothing changes in the UK until after Article 50 is invoked (which will crash UK markets and send global markets lower), then there is a two year period whilst the EU and UK disentangle from each other after which the UK can start to attempt to find a trade deal with 27 jilted nations…
In Europe over the course of the week, the FTSE was up on last week’s close by 7.2%, it closed at 6577.8; the Dax ended at 9776.1, up by 2.3% on last week’s close; the CAC was up by 4.1% to end the session at 4274.
The Dow ended the week up by 3.2% to close at 17949. The Nasdaq composite index ended up by 3.3% over the course of the week at 4862.5.
The Nikkei 225 ended the week’s trading up by 4.9% to end the session at 15682.
Currency markets review
On the currency markets last week the Euro enjoyed the best of the trading. The Dollar was stronger against Sterling last week closing at $1.3279 to the Pound, a gain of 3% on the week. The Greenback weakened against the Euro last week by 0.19% to close at $1.1139 to the €. The Dollar was stronger against the Japanese currency, closing at 102.6 Yen to the Dollar, making a gain of 0.37% during the week.
The Euro was stronger against the Yen ending at 114.3, a gain of 0.55% over the course of the week. It made ground against Sterling last week, rising by 3.1%; the close saw one £ buying €1.1921. The decline of Sterling against other major currencies is a reflection of what the market thinks of Brexit and the likely economic fortunes of the UK as it continues to weaken.
The Euro now buys 1.0840 CHF, a gain of 0.11% on the week.
Commodities market review
On the commodities market, the price for Brent crude ended at
