Will Europe unravel?

SINGAPORE (Aug 1): Markets have rebounded since the UK voted to withdraw from the European Union on June 23, with the Standard & Poor’s 500 index and FTSE 100 touching 12-month highs and the pound sterling back above 1.30 versus the US dollar.

In the EU, the euro has held steady against the greenback, and consumer sentiment is improving on better export, inflation and unemployment data.

“The impact of the Brexit vote on the EU appears to be minimal so far, with equity markets rebounding from the post-referendum slump and government bond yields at record lows or even negative. And, economic indicators such as the purchasing managers index for July are holding steady despite declining in the UK,” says John Woods, Asia-Pacific chief investment officer at Credit Suisse.

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