Market View from An Insider

A friend who heads trading a major London bank – his views: (so supports my view on UK stocks and looking to go long GBP in July).

A lot more ‘smart money’ voted out than you may think. This is what I have noticed brosephine… re trading what we’ve found baffling is how muted the risk asset sell off has been. Indeed look at the sharp recovery today. One reason cited is the flat to short positioning (real money flat and long a lot of cash and hedges short) keeping things in check but I can’t help thinking there’s more to it than positioning
.. all I read are negative reports and about more questions than answers, game theory, eu not setting a precedent with UK etc
So in light of that the market has taken a decidedly different tone. The only supplementary explanation I can offer is most participants like me are ‘relieved’ the vote is over and have a degree of confidence that whilst both parties need to save face, the reality is their goals are aligned to a significant extent. That pragmatism maybe combined with the positioning alluded to earlier, confers a strong tone to the marche, at least for now. I’m not blind to xenophobia issues and other social considerations which are significant but purely looking at the market, sanguine for now.

Also all this talk about London losing status as financial centre is far overblown. Yes, there will be shifting of some operations eg custody, clearing and some ops and that’s a maybe but for most revenue generating functions, I don’t see that at risk of being displaced.

Nowhere else in Europe has the capacity both intellectual and societal to cope and handle that flow of labour …. notwithstanding the unwillingness of that demographic to move to cities like frankfurt, Dublin etc which can never offer anything close to London. So overall matey stable, keeping a tight book close to home pending more…’inspiration’