When in the course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, markets shoot into the air like fireworks or fall like a dud. Natural gas provided traders with fireworks while crude oil was more like a dud as the Brexit vote is still causing trading screens across the globe to light up like it is the Fourth of July.
While global stock markets rebounded on the post Brexit vote under the assumption that this will be a long drawn out process, it is clear no one has a clue how this Brexit thing is going to unfold. No one has a plan, not even the leave camp. What is clear is that it will be a long drawn out political game of charades and the markets think that this will have very little bearing on the short term world. At the same time, it will make it hard to be too comfortable in a position due to significant headline risk.
Commodity currencies such as the Australian and New Zealand dollar spiked higher today, as markets regained some appetite for risk after Britain's shock vote last week to leave the European Union sent investors in search of safety.
It looks like global markets want to put Brexit behind them. Yet, despite a significant rebound, the bond yields and the gold market suggests we have not had the last panic on Brexit just yet. On one hand the rise in gold and the drop in global security yields seem to suggest that there is more fear ahead or at least more global economic stimulus.
Crude oil has been among the biggest gainers in the first half of the year. One of the main reasons oil bounced back sharply was probably the fact that it had fallen well below its fundamental value due to panic selling earlier in the year.
After the Brexit bash, global markets are trying to steady themselves as the historic shockwaves of the Brexit vote will continue to cause unease in global markets. The fact that Brexit will actually happen anytime soon is allowing the markets to try to act more normal even as everything in the world has changed.