DNB| Luxemburg, 13.07.2016.
What we did not expect, but feared, did actually happen last week. The UK has chosen to leave the EU. Fear of Brexit was one of the reasons why we recommended underweight equities in the June market view. The referendum outcome contributes to underweight equities also in July.
The political risk has increased
The fear is that voters in other EU countries, where discontent with the union also is significant, will demand additional referendums. This creates uncertainty about economic growth, which results in greater volatility in financial markets.