Good Morning,
Did you know that China spends more on infrastructure than the US and Europe combined?
So will the potential “Brexit” alter spending and adversely impact global consumer and business confidence?
Yes… short-term for sure…
so would we prefer a Brexit and a Trump or just a Brexit?
We see both adding “uncertainty” to global markets and when there is uncertainty, there is generally weakness…
So how can we make money from this potential “Brexit” on the 23rd?
Leading to the vote, global equities “should” trade lower…..
So we should position our portfolios accordingly…
Why?
As uncertainty + fear = weakness in risk assets…
On the vote itself and given that the results of the vote will be during the AUS/Asian trading session, we should wait for the results and then look to either buy or short-sell the GBP or the index, as the movement will be extremely large.
This “positive” or “negative” surprise will not last a few hours, it will last a few days, so there is money to be made here….
The safest strategy is to wait for the vote itself, rather than try and predict what will happen as this is a 50:50 call…
So what happened last night?
US Stocks closed lower (Dow -34 points), as the central bank reiterated that interest rates are likely to rise at a "gradual" pace, without referring in the statement to the next meeting in July or any other specific timing for another increase.
What's on today?
Jobs data, Motor vehicle sales. RBA Deputy Governor Dr Philip Lowe speaking in Brisbane
The SPI is down 1 point this morning
Niv Dagan is an Executive Director of Melbourne based boutique funds management and corporate advisory firm, Peak Asset Management (www.peakassetmanagement.com.au). He is also a regular financial commentator on Sky Business.
