EU president: new Britain-EU relationship would take 7 years

The chances that Britain will vote to leave the European Union increased sharply on Monday to 36 percent, the highest level since the June 23 referendum was announced by Prime Minister David Cameron four months ago, according to betting odds.

The yen gained broadly, hitting a one-month high against the dollar and three-year high against the euro on those Brexit concerns and worries over political fallout after Sunday’s mass shooting in the United States.

A Deutsche Bank strategists’ note said: “In the case of a Leave vote in the United Kingdom referendum. we expect United Kingdom equities to outperform the European market, given the likely GBP (British pound) depreciation in such a scenario as well as the market’s defensive sector structure”.

Despite several attempted rallies since, the country’s benchmark indexes have still not been able to pull much off the lows hit last August, though they have not retested early 2016 lows.

Apple shares fell 1.5 percent as the iPhone maker held its developers conference in San Francisco.

In opening deals, the FTSE 100 was off 42.4 points at 6, 073.6, having closed 116.13 points lower on Friday as traders fretted over the numerous market threats including a possible Brexit, volatile oil prices and upcoming central bank meetings.

Moves in Europe, where investors have been preparing for the British vote for months, were only slightly more subdued.

“We have downgraded the China market because of the debt problems and we think by the third quarter, growth numbers would start reflecting a broader slowdown”, said Francis Cheung, head of China and Hong Kong strategy at CLSA.

JPMorgan says that GBP/USD will fall to 1.30 in the case of a “leave” vote – from a current level of 1.4165 – but that in the case of the United Kingdom leaving the EU, European equities would weaken more the United Kingdom equities. Britain’s FTSE 100 was down almost 0.5 percent at 6,086.25. Eastern. The Standard & Poor’s 500 index fell seven points, or 0.4 percent, to 2,089 and the Nasdaq composite fell 29 points, or 0.6 percent, to 4,866.

European shares were under pressure as the vote for Great Britain to leave the European Union draws closer. It had shed $1.49, or 2.9 percent, to $49.07 a barrel in NY late Friday. It was down by more, 1.2 per cent, at 79.86 pence per euro.

“The Fed will meet this week and while the (May) jobs report may have given them a reason to put off raising interest rates again, the closing of the gap ahead of the United Kingdom referendum is likely the real reason behind the delay”, he said.

In an interview with Germany’s Bild newspaper published on Monday (13 June), the council president Donald Tusk said that a British exit from the European Union would have “long term consequences that nobody can foresee”.

The declines in Europe followed on from a dire day in Asia, where Japan’s Nikkei 225 ended the session in the red by 3.51%, alongside another 0.75% drop in the U.S. dollar/yen to 106.17.