‘Brexit’ wrap-up: GBP, Cameron, Carney

Against (not all) odds, the UK has voted to leave the European Union at the Referendum on Thursday, with almost 52% of British citizens aligning with ‘Leave’ campaigners such as Boris Jonhson, Nigel Farage and Jeremy Corbyn.

Chaos soon followed, as expected: the British pound plummeted to levels last seen in 1985 around 1.3230 vs. its American counterpart (from 1.5020 just after poll stations closed), although it is now managing to advance through the 1.3800 key barrier as the European session is under way. The FTSE100 followed suit, down nearly 8% or more than 500 pts soon after the opening bell - albeit recovering the 6,000 handle by now - and yields of UK Gilts in fresh lows, with the 10-year benchmark slumping to test all-time lows in the 1.000% neighbourhood.

Another victim of ‘Brexit’ was PM James Cameron, who confirmed he will step down by October, with some rumours already pointing to ex-London mayor Boris Johnson as his successor.

Governor of the Bank of England Mark Carney has once again reiterated that the central bank will not hesitate to take the necessary measures, adding that the central bank is ready to pump in £250 billion of additional funds. Carney said that extensive contingency plans are already in place, while the resilient banking system will surely support the upcoming economic adjustments. Furthermore, the ‘Old Lady’ will remain vigilant on upcoming developments and could re-assess the situation in the next weeks. It is worth noting that OIS is already pricing in a 25 bp rate cut by November.