The UK's decision to leave the European Union may have come as a shock to markets, but the effects of the decision do not appear to have been as severe as anticipated, says NAB.
In a statement to investors, NAB chief economist Alan Oster noted that after the initial reaction, global equity markets moved back up to their pre-referendum levels, and market volatility is now not only lower than it was prior to the vote, but is “very low by historical standards”.
“Bank lending surveys do not point to much impact of Brexit outside the UK either,” Mr Oster added, although globally, central bank action has “tended to disappoint” those hoping for action to address deflation or slow growth risks.
Monthly business surveys have also remained relatively stable, Mr Oster said, with “July readings not far off those in June, despite a big post-Brexit hit to UK business sentiment”.
“Activity was better maintained in services than in manufacturing in the big advanced economies and the former is by far the biggest sector in these economies,” Mr Oster said.
Nevertheless, the UK is expected to experience a recession, Mr Oster cautioned, which could have a knock-on effect on eurozone economies, following lower demand for European exports.
Wealth management relationships are under threat as clients look to switch providers driven by the impact of the royal commission. ...
S&P Dow Jones has announced a new addition to its global ESG index using enhanced ESG scores and granular data. ...
Investor confidence is on the rebound and the ASX hit a 12-year high on Monday. But it’s not all good news for the Australian economy. ...