• New Zealand bonds close higher as brexit wins with 51.9 pct votes

    Source: FxWire Pro - Money Market / 24 Jun 2016 02:48:12   Eastern Standard Time

    The New Zealand government bonds market closed higher on Friday as Britain voted to leave the European Union, with the Leave campaign securing around 51.9 per cent of the vote. Also, Prime Minister David Cameron will address the nation shortly, is now facing calls to resign as Prime Minister.

    The yield on benchmark 10-year bond, which moves inversely to its price fell 1-1/2 basis point to 2.390 percent, yield on 7-year note also dipped 1-1/2 basis point to 2.090 percent and the yield on short-term 2-year note tumbled 1 basis point to 2.020 percent.

    Britain has voted to leave the EU in a popular revolt that will send shockwaves across Europe, leaving David Cameron’s premiership hanging in the balance and triggering financial market turmoil across the globe. With all the votes counted, 51.9 percent voted to sever Britain’s 43-year membership of the EU, 48.1 percent to stay in.

    Interestingly, Farage declared victory in a speech held in London as a Brexit looked increasingly likely.

    "The dawn is breaking on an independent United Kingdom," he said to loud cheers at a Leave campaign party.

    Following the UK referendum decision to leave the EU the FX market has gone into meltdown with the Pound falling massively overnight. GBP/JPY is currently down almost 13 percent, GBP/USD -9 percent, GBP/CHF -7 percent and GBP/EUR -6 percent, and these are not the low points reached.

    At one stage overnight GBP/JPY was down by 15.3 percent on the day at 133.50, GBP/USD was down 11 percent at 1.3240, GBP/CHF -9.6 percent at 1.2875 and GBP/EUR -7.7 percent at 1.2035. Markets remain highly illiquid and volatile say traders with no sign of any G7 joint intervention, so far.

    Meanwhile, the British pound has been absolutely hammered by the news that Britain has voted to leave the EU. Sterling has suffered its biggest ever drop, and is currently hovering around $1.36, down 8.5 percent. The New Zealand’s benchmark S&P/NZX50 Index closed down 2.25 points to 6,667.78.