What’s going on
- The Brexit referendum happened 6 months ago, but the United Kingdom (U.K.) is likely to actually begin its formal process of exiting the European Union (E.U.) this month by triggering a provision in the treaty known as Article 50.
- However, investors should expect Brexit to be a drawn-out process as negotiations between the U.K. and the E.U. are likely to take at least two years.
Why it’s important
- Many economists worry that the Brexit process will damage the U.K. economy over the long term. Although the U.K. economy has held up well since the Brexit referendum last June, analysts are watching for signs of slowing growth later this year as Brexit unfolds.
- Another key concern is that other countries may follow suit in leaving the E.U. Anti-E.U. sentiment, which seems to be spreading across the European continent, could influence elections later this year in the Netherlands, France, and Germany.
- In short, 2017 could be a decisive year for the fate of the E.U. and the euro.
What to expect
- In addition to the possible near-term economic impacts of Brexit, we believe European policymakers face many long-term headwinds as they try to restore their economies to full capacity.
- Issues that spawned Brexit—including growing nationalist sentiments and the migration crisis—will likely continue to make life difficult for policymakers for some time to come.
Seems like if the Dutch nationalist party has a strong showing in the election on Wednesday, that could mean support for a further break up of the EU and send yields up. A triggering of Article 50 in the U.K. (potentially this week) is expected to keep the pound weak.
Article goes into more detail: http://ift.tt/2mjVfBo
Submitted March 13, 2017 at 01:07PM by jerick1992 http://ift.tt/2mEtaYc
