Britain joined the then nascent European Economic Community back in 1973. Roughly 10 years or so later, British working class punk gods The Clash sang "Should I Stay Or Should I Go?" Today, Britain gets to decide that decades old musical question about its future by either staying within the EU, or striking out on their own. The stakes couldn't be higher for Britain, the EU, and - some would argue - the world.
By Paolo Palazzi-Xirinachs
Thursday, June 23, 2016
First results from the referendum should become available about half past midnight (UK time) and the majority of results should be reported by around 5AM. The US markets, in anticipation of this, have risen this morning as hopes grew that Britons would vote to remain in the European Union. Investors were buying stocks and selling bonds, sending banks higher. Energy company shares were up with the price of oil. Near midday EST, the Dow Jones Industrial was up 1%, and the S&P 500 up 1.01%. The Nasdaq also gained 1.24%.
Investors are awaiting the outcome of the Brexit referendum on Britain’s membership in the European Union. An exit is likely to send global shares and European currencies tumbling, analysts predict, because of the economic uncertainty it would create in the region. Over the last few days, stocks have gradually moved higher as investors grew more confident that Britain would not leave the union. Before that, though, the markets slumped as investors worried that a “leave” vote would disrupt the economies of Britain and Europe.
Meanwhile, bond prices have fallen, sending the yield on the 10-year US Treasury note up to 1.73% from 1.69 a day earlier. Higher bond yields mean higher interest rates, which allow banks to make money on lending. Citigroup shares gained 3.3% and Bank of America's stock rose 2.5%.
In other non-Brexit related economic news, the number of people filing claims for unemployment benefits fell last week to 259K, compared with estimates for 270K, according to a Labor Department report. Federal Reserve Chair Janet Yellen finished two days of testimony to lawmakers on Wednesday signaling a cautious and uncertain view of the economy. Traders have reduced their wagers on higher borrowing costs, pricing in less than even odds of a move at least until December.
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