The UK’s EU referendum took a nasty turn last night during the PM’s question time on Sky News. Suffice to say he got quite the (cold) reception. As I have noted continuously there are solid arguments both in favour of REMAIN and BREXIT. However, one cannot escape the financial implications of a BREXIT vote, the consequences which will be felt for years to come. I totally agree with the LEAVE camp’s argument regarding immigration/migrants/benefits/costs etc. Only recently I read a story about a Canadian family that has been given till today to sell up and get out (despite investing £200k and working hard to maintain their family) simply because they have not hired someone (something like that). On the flip side, a man from the EU arrives alone, cannot get any benefits/housing, so returns home picks up his 5 kids and wife returns to the UK walks into the benefits office and yes you guessed it, housing and benefits. Welcome to a Socialist Society. We made these laws, and fortunately or unfortunately we need to stick to them. That is a democracy at work. Of course it is not fair of course the 13,000 offenders currently in the UK enjoy the UK’s hospitality, but the law is the law. So here is a good idea, CHANGE THE LAW IN FAVOUR OF YOUR OWN COUNTRY AND HER CITIZENS. Job done. Unfortunately it was easier said than done. Something needs to be done and done fast or the UK will find herself back on her knees and financially bankrupt. Brexit’s argument on implementing an Australian points system does not work. The migration of people into the UK differs massively to that of Australia, not to mention a small difference in size. The Aussies system while commendable still has its faults and shortcomings and I simply cannot see how the UK will be able to implement it.
The UK needs to change our benefits laws. You want to come here, fine but for 3 years no benefits, no housing and no free NHS. Pay your own way and after 3 years if you can prove you are sustainable then great, welcome to the UK. When I arrived in 1996 from South Africa that is what happened to me. Except for me it was 5 years. I thought you know what that is fair. The more I put in (taxes and working) the more I can ultimately get out.
What we can expect then over the coming 3 weeks is financial instability and the increased volatility in the FX markets. The EU referendum has far reaching consequences not only for the UK, but for all our trading partners. I fear a serious backlash if BREXIT wins as the big EU economies shun the UK in favour of friendlier shores. The BoE is not scaremongering. They are petrified I am sure of the result. Let’s hope sense prevails and people see the benefits are staying in the EU and being part of the family.
Prepare today for the BIG event – US Non-Farm Payrolls. Huge event. With the upcoming FED meeting on rates on the 15th June the FED will be hoping for a BIG number to confirm Pres. Yellens recent comments that they are looking to hike 3 times in 2016 (06+07+12) – The market is forecasting a rise of +164k (from +160k previous). Anything worse than that and I wonder what the FED will do, after all they claimed rate hikes are data dependent. Looking at the price action in EURUSD, it would appear the market is LONG USD and expecting a good number today to confirm the hike is coming. Then again who really knows?
Have a super weekend
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