![\"Imagegraph8eng\"](\"https:\/\/latribune.lazardfreresgestion.fr\/wp-content\/uploads\/2016\/02\/Imagegraph8eng.jpg\")
<\/p>\nCHART OF THE WEEK<\/b><\/p>\n
On the heels of last week\u2019s agreement between the British government and its EU partners, David Cameron announced that the referendum on the UK\u2019s continued membership in the European Union would be held on 23 June<\/b>. The issue has created rifts within Britain\u2019s two biggest parties. In the Conservative ranks, several government ministers and Boris Johnson, London\u2019s ever-popular mayor, have declared they will be campaigning for \u201cout\u201d.<\/b><\/p>\n
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Our analysis<\/b><\/p>\n
The pound sterling immediately slid 1.8% against the dollar and shed 3.7% over the week<\/b>. It also lost 2.6% of its value<\/b> against a basket of currencies representing Britain\u2019s primary trading partners \u2013 its sharpest decline since 2009<\/b>. This shows that investors use the exchange rate to insure themselves against \u201cBrexit\u201d risk.<\/p>\n
Bond yields are unlikely to go haywire<\/b>, as Britain has its own central bank. At the same time, a weaker currency is good news for equities. Following the pound\u2019s forced withdrawal from the European Exchange Rate Mechanism in 1992, the Footsie shot up 20.5% between 16 September and 31 December, while the CAC marked time, the Dax fell 2.5% and the S&P 500 added 3.8%.<\/p>\n
The United Kingdom is running a high current account deficit (4.7% in 2015 according to the IMF) <\/b>that has to be financed \u2013 whereas leaving the EU could make it harder for the country to attract the capital flows it needs to pay the bill. So the pressure on sterling seems set to continue<\/b>.<\/p>\n
The opinion expressed above is dated as of February 26<\/i>th<\/i>, 2016 and is liable to change.<\/i><\/p>\n
\u00a0This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Fr\u00e8res Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Fr\u00e8res Gestion SAS.<\/span><\/b><\/p>\n","protected":false},"excerpt":{"rendered":" CHART OF THE WEEK On the heels of last week\u2019s agreement between the British government and its EU partners, David… <\/p>\n","protected":false},"author":101016,"featured_media":1523,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[148,1274],"tags":[],"class_list":["post-1506","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-chart-of-the-week","category-graphique-de-la-semaine-en"],"yoast_head":"\n