Global markets sold off sharply on Friday, as Britain’s unexpected vote to leave the European Union (EU) Thursday caused the pound to sell off to its lowest levels in 30 years. The Dow Jones Industrial Average also fell over 500 points mid-day.
Unlike some EU member countries, the UK has its own separate currency rather than the euro. It also has its own central bank, the Bank of England, removing some of the disruptive risk potential tied to the Brexit, according to JPMorgan’s Adam Crisafulli.
But there’s still a big question looming over the world markets: Will the Brexit have a ripple effect that spurs other countries to leave the EU or otherwise spurn globalization?
“Is the Exit decision a uniquely British one?” Crisafulli wrote in a note this morning. “Or does it reflect a worldwide electorate so distraught and economically frustrated that similar outcomes should be expected going forward?”
A slew of barometers to test the effect of a Brexit will come soon in the form of elections coming up across the world – including an election in Spain in just two days. Australians go to the polls on July 2, Japan on July 10, Italy in October and the US on November 8. France and Germany hold national elections next year.
