Focus on how the EU and the ECB will respond to the UK vote – Danske Bank

Research Team at Danske Bank, suggests that the key focus in the market will be the implications for and policy response to a Brexit for the UK, the EU and the global economy.

Key Quotes

“In the UK, the key question will be the political and economic response to the result. The future of the UK government is uncertain with the speculation that David Cameron will step down. We expect the BoE to respond with GBP liquidity and swap lines with major CBs could be activated.

In the rest of Europe, focus will be on how the EU and the ECB will respond to the UK vote. We expect a statement from the Eurogroup today, while a strong coordinated EU response is likely either before or after the EU Summit next week. Today, the ECB will signal that it is ready to act through its QE programme and over the coming 1-3M we look for a step-up in the monthly QE purchases to EUR100bn.

Other not UK related events include the TLTRO announcement from EC today at 11:30 and the Spanish general election on Sunday is also worth keeping an eye on.”