Global markets are tumbling, there’s political turmoil in the U.K., negative-yielding bonds expand, and a surprise winner emerges from Spain’s election. Here are four things to know in the market today, June 27.
1. Global Markets Are Lower
Markets are still in a panic on Monday after the U.K. voted to leave the European Union in a referendum on Thursday.
The sterling continued its decline, falling to a new low of $1.3194 in early morning trade. The Stoxx 600 Index in Europe fell 2.4%, London’s FTSE 100 tumbled 1.3%, and S&P 500 futures were 0.9% lower.
Banks on London’s FTSE 100 were hit the hardest.
Asian markets closed the overnight session 0.5% higher.
2. Political Turmoil in the U.K.
The effects of the U.K.’s decision to leave the EU isn’t limited to financial markets. Prime Minister David Cameron, who announced his resignation in the coming months, rejected a do-over Brexit vote over the weekend. The Labour Party, the main opposition party, seemingly turned on itself. George Osborne, Finance Minister, tried to calm panicking markets Monday morning, reassuring that the government is capable of handling whatever comes next.
3. Negative-Yielding Bonds Expand
The number of negative-yielding sovereign bonds expanded on Monday as more investors rushed to safe havens. The U.K. 10-year Gilt yields plunged to under 1% for the first time in history.
The commodity market, on the other hand, may prove itself to be more resilient despite the market taking a hit after news broke of the referendum’s outcome.
4. Spain Elects a New Prime Minister
Meanwhile in Spain, Prime Minister Mariano Rajoy was the surprise winner in the country’s general election. The People’s Party won 137 seats in Spain’s 350-seat chamber. Rajoy says he’ll deliver a government within a month.
Spain’s stocks and bonds are outperforming on Monday despite the fallout from the Brexit vote.
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