2016-06-24 14:30:22

In accordance with the results of referendum where 52% of population voted for the exit of the country from the EU and 48% against the exit, the UK will leave the EU. The outcome of referendum has shaken financial markets, leading to the decline in the Pound by 11% and to the sharp decline in global stock markets. The banking sector of Europe has lost more than 10%, and shares of companies in the real estate sector fell by 13.4%.

Results of the referendum may lead to the political and economic turbulence and instability, both in the UK and in the EU and in the other regions. Investors, who hoped for the different outcome of the referendum, have suffered significant losses.

FTSE100 and StoxxEurope600 fell by 11% and 8% respectively; however, there are signs of minor recovery after the significant decline. Futures for the S&P500 fell by 5% at the opening session, which is the limit of decline. The USD index Wall Street Journal has grown by 2.47% to 87.25.

Swiss National Bank has carried out intervention to in the currency market in order to stabilize the situation. SNB stated that in the Bank would continue to interfere into the currency market.

Brent crude fell by more than 6.5%, to 47.50 USD per barrel; however, later at European session price-spot went up to the level of 49.00. August futures for Brent at ICE oil Futures fell in price by 2.74 USD, or by 5.2%, up to 48.17 USD per barrel.

Demand for oil in Europe may fall in anticipation of the sharp decline in the industrial production in the European countries, due to the reduction of economic growth in the EU economy and British exit from the EU.

In addition, oil prices are now under pressure, due to many other factors: the increase in the number of the operating drilling rigs in the United States, possible resumption of production of shale oil in the USA, the continuing oversupply of oil in the world and strengthening in the USD. It is very likely that oil prices will continue to fall in the short term.

Brent: Oil prices fell down.  Fundamental analysis as of 24.06.2016