EU officials have already begun making plans for a Brexit whilst German Finance Minister Schauble warned that the UK would have to adhere to EU policy if the the UK wanted to continue trading with the EU.
Barclays released a report last week that suggested if the UK leave the European Union then there may be 1 quarter of loses for Sterling however after that the Euro would start to lose ground. The UK is a positive contributor to the EU and after the shock a Brexit might bring the EU would have to make up the financial deficit left by Britain.
There has been no secret that there is an anti EU Sentiment developing in a lot of the nations who share the Euro. Large numbers of people in Sweden, Netherlands, Germany, Italy and unsurprisingly over 2 thirds of Greeks want the EU controls to be curtailed. Should the UK Leave that may supply over nations with the impetus to remove themselves and more importantly a skeleton of how to.
German Finance Minister Wolfgang Schauble said officials in the Euro area have started making plans for a potential Brexit. There are preparations being made to make sure all potential dangers are contained including other nations trying to leave. Schauble once again made it clear that if the UK wanted to trade with the single market they would have to adhere to the rules.
The Vote Leave campaign Chief Executive Matthew Elliot didn’t agree with these comments and in a statement suggested the Eurozone economies are dependent on trade with the UK. Elliot went on to say it would be perverse for the EU to make artificial barriers and would do them more damage to them than anyone else.
The Eurozone this week will release Industrial Production and Employment change on Tuesday. The trade balance figures will be released on Wednesday which will indicate the difference between the regions imports and exports. Thursday the Consumer Price Index is expected. Due to the UK Referendum it seems unlikely that these releases will have much bearing on the markets however anything unexpected could have an impact.
Sterling has weakened further this week and could be set for further weakness as we approach the final week of the EU referendum. If this is likely to impact you, call our trading floor on 01494 725 353 or email me here and we will be happy to discuss your options with you.
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