Vive la Revolution
2017 is a critical year for European politics not to mention the triggering of Article 50 and Trump.
"Good afternoon ladies and gentlemen. On behalf of the captain and all the crew, I’d like to welcome you to EU Referend-Air flight 666 with non-stop service to… well, we’re not entirely sure.
The campaigning is over, the cabin doors are now closed and we are ready for take-off. At this time, please make sure your seat belt is securely fastened, your seat back is in the upright position and your market exposure is correctly hedged. Please switch off all your electronic devices. We’re not sure why we need to do this on flights but please be aware that many banks are likely to switch off their electronic FX trading devices.
We are anticipating very turbulent conditions on this flight so please pay close attention to the following safety announcements:
There are several emergency exits. Please take a moment now to locate your nearest exit, bearing in mind there may be no available exit for long sterling positions in the event of a “Leave” result.
In the event of a landing outside the EU, the exits may not be available until the market has reached the GBPUSD 1.25-1.30 level, by which point you might not want to use them anyway. Sick bags are available in your seat-back pocket, please seal your trades inside the bag and pass it to the nearest hedge fund.
In the event of a landing inside the EU, you might like to remain seated until the market moves have come to a halt in the low 1.50s in GBPUSD and traders have switched off the seatbelt sign. The market may resume trading but liquidity could remain thin as the market re-adjusts to the new environment.
In the event of an impending market crash, you may be asked to adopt the brace position. The trading desk will issue the following warning: “BRACE! BRACE!” At this time, lean forward in your seat, rest your head in your hands and brace for impact.
Thank you for your attention. We wish you a safe flight, and hope you enjoy the ride".
Mark Stafford Head of FX Trading and Structuring at Investec Bank Plc
The opinions and views expressed are for information purposes only and are subject to change without notice. They should not be viewed as independent research, recommendations or advice of any nature.