Last month, we noted that according to JP Morgan, persistently low oil prices are set to create a $75 billion headwind for global equities in 2016.
At issue are sovereign wealth funds, many of which are funded with proceeds from oil sales. For years, producers were next exporters of capital. That is, they funneled their crude revenue into a variety of assets including USTs and other core paper as well as equities and real estate.
The overnight news was decidedly downcast, with first London mayor Boris Johnson voicing his support for Brexit leading to a collapse in the pound, validating our Saturday warning and then some, resulting in the biggest drop in cable in over a year over fears that the EU will lose one of its most critical members...
While in the US market breaks practically always happen when the market is sharply lower, and are intended to halt any downward momentum, in Europe this simple relationship has yet to be perfected, and for the past hour, following what it announced were technical issues, the Deutsche Boerse-owned Eurex derivatives exchange where futures on such indices as the DAX and Switzerland trade, has suspended trading in its T7 system "until futher notice."
Sellers will just have to wait.
Link for the latest news on the trading halt.
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David Haggith: The Economy is Failing All Over The World
Posted with permission and written by Rory Hall, The Daily Coin (CLICK FOR ORIGINAL)