Brexit

A vote for the UK to exit the European Union next week is likely to intensely magnify a strong rush into safe haven assets, but some bankers are still confident that after the initial furore of a ‘Brexit’ there could be room for issuers eyeing euro deals in July to go ahead. And, if the UK opts to stay in the EU, issuers are likely to be lining up to print in July.

The dollar market ended its record-breaking run of issuance this week as uncertainty around the outcome of the UK referendum vote caused buyers to take flight and spreads to widen.

Be under no illusion. A vote by Britain to leave the EU would be a cataclysmic event for the European capital markets. In the worst case scenario — Brexit kicking off a full EU collapse — it could make the horrors of late 2008 look like a picnic.

If the UK votes to leave the European Union on June 23, and a Brexit leads to fears the EU will fragment, EM bond markets will not escape the volatility that ensues in the immediate days after the referendum.

A rush to safe haven assets amid fears of a UK exit from the European Union crystallised higher Spanish bond yields at a bond auction on Thursday.

Predictions from both sides in Britain’s EU referendum suggest economic disaster if the country votes the ‘wrong’ way. But history shows the dangers of doom-mongering.

Asia’s bond markets have remained resilient despite a Federal Open Market Committee meeting this week and rising concerns about the UK referendum on European Union membership. With deal flow building up for next week, bankers said Asian issuers stand to benefit from volatility in Europe, writes Narae Kim.

Equity capital markets issuers and banks successfully completed the first batch of summer IPOs last week, and there is now expected to be very little activity until after the UK’s referendum on June 23.

A new poll on the UK referendum on EU membership published on Monday intensified fears of a Brexit, sending FIG spreads across the capital structure wider on Tuesday.

One of the cases pro-EU UK politicians make, at least to City officials, against Brexit is that the whole of post-crisis regulation would have to be rewritten from scratch, leaving banks facing years more uncertainty.

A flurry of corporate borrowers came to market this week, but the UK’s approaching referendum on Europe has struck terror into the heart of liquidity providers across all walks of the derivatives market.

A growing number of foreign exchange brokers are increasing their margin requirements on currency trades to protect themselves from Brexit volatility, with several outlining planned hikes around this month’s UK referendum.