The aftermath of Brexit

The initial Brexit shock to markets has subsided, and liquid asset prices have rapidly adjusted to the new reality. In general, there has been a flight to 'safe haven' assets whereas investments most directly exposed to the UK economy have suffered falls, in some cases substantial. However, market moves so far have been less violent than many doomsters' predictions ahead of the poll, and there are few (if any) signs of a market crisis, global contagion, or systemic chying-up of liquidity. Other than in the immediate post-poll trading, when some UK stocks and European financials fell precipitously, the market reaction is typical of moves following a shock outcome to a key decision, which in the case of the UK referendum was regarded by many commentators as globally significant.