Britain considers a Brexit
MONTHLY MARKET COMMENTARY |
Capital market returns in risk assets were mostly flat or negative for the month of February, keeping year-to-date results for 2016 in negative territory. Domestic equities roughly broke even after a late rally offset most of the poor returns from earlier in the month. International equities lost ground with concerns about deflation in Europe and slowing growth in China. Fixed income was mostly positive around the globe for the month as investors continued to seek less risk-oriented assets.
In February, Britain’s Prime Minister David Cameron scheduled a June 23 referendum as to whether the country should exit (coined “Brexit”) the European Union (EU). Prime Minister Cameron’s announcement came despite his desire to remain within the EU, but fulfills a promise he made during his 2015 re-election campaign. In order to make Britain’s position within the EU more appealing, he renegotiated the terms of its membership in the days before announcing the referendum, gaining special status in the EU.