A busy week in markets, what does it mean for you?

The Brexit referendum in the UK has created significant rumbles throughout the global financial markets, and it is absolute that there will be continued uncertainties for quite some time. The reading of various commentaries at the moment, out of the UK and Europe, is interesting. London is currently the financial hub of Europe, whilst the whole of Europe presents the largest collective trading group in the world. There is no doubt that actions now being considered by the UK, and in fact individual countries in Europe, will have significant impact for everyone.


UK headed for recession?

A number of the Eurozone member countries are relying heavily on their partners for support, and this event will certainly rattle some cages, hence the “uncertainty” ahead of us. Most actually predicted that the outcome of the referendum would be to stay, and this also is why there has been a significant initial kneejerk reaction in the markets, and many economists are suggesting that the progress from here is up there in significance when compared to events such as the great depression, and the Global Financial Crisis of more recent times. Potentially, the UK is headed for recession.


New Zealand business as usual

However, the New Zealand markets are actually pretty well placed and likely to continue business as usual, despite our local issues of property prices and reliance on exports being impacted by exchange rates. We believe that New Zealand will largely escape a lot of the northern hemisphere fallout, and pressure on current low interest rates fuelling borrowing, and exchange rates being at higher than desirable levels for exporters, would suggest that our lending rates are most likely to stay at current low levels for some time yet. There may be some pecuniary additional costs impacting on the wholesale cost of funds for the Banks, which may be passed on in subtle rate adjustments, but we don’t think the Reserve Bank will be lowering the OCR at the next review. 

On the home loan side of things, our Advisers are turning out some great results for clients including less than 24-hour finance approvals so clients can get to auction at the last minute.  


Advice on what's happening in the market

Our mortgage advisers are here to give you great advice about what's happening in the market so you can work out the best solution for your business or home loan.  Contact an Adviser today.


Jon O’Connor

About the Author

Name: Jon O’Connor        

Jon is the General Manager of Rothbury Life & Morgages, a nationwide life insurance and mortgage advisory operation for Rothbury Insurance Brokers

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Jon is the General Manager of Rothbury Life & Morgages, a nationwide life insurance and mortgage advisory operation for Rothbury Insurance Brokers


Disclaimer: The articles published on this blog are designed to provide general information and do not take into account any individual’s particular circumstances. We recommend that you obtain professional advice on your requirements before making any decision about a financial product.

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