Not even this morning's mandatory European open ramp has been able to push US equity futures higher, and as a result moments ago the E-mini hit session lows on rising concerns about Brexit as talks drag on in Brussles, but mostly as a result of overnight confusion about China's loan explosion and whether the PBOC has lost control over its maniacally-lending banks.
Amid today's summit and Cameron's looming pitch to The Brits, the market is starting to take the risk of UK's exit from the EU seriously...
Various indicators across markets can be used as a 'sentiment' guide for fears (or hopes) about BREXIT, but, as MacroMan notes, perhaps the simplest and cleanest is the 3/6/12 month implied vol butterfly in GBP/USD, given that the referendum is widely expected for June, a little over four months from now.
MacroMan continues,
Richard Haass warns against “Brexit” and makes an unusually frank admission about why he hopes it doesn’t happen:
Even worse, it is highly probable that Americans advocating for a reduced US role in the world would seize on Brexit as further evidence that traditional allies were not doing their fair share, and that a US facing growing deficits and massive domestic needs should not be expected to make up the difference.
The writing has been on the wall for quite a while and indeed it was just three days ago when we reported that the EU was mulling a two-year Schengen suspension amid the wave of Mid-East asylum seekers streaming into Western Europe, but now it looks to be official.
Or at least semi-official.
According to AP, who cites documents, the EU is set to restrict passport-free travel and allow member countries to "unilaterally put up border controls."
Here's the story:
“Forget it.”
That’s Turkish ambassador to the EU Selim Yenel’s message to Europe in response to a Dutch plan that would resettle 250,000 refugees per year directly from Turkey if Ankara can manage to close off the Aegean sea route to Greece.