The aim of this bachelor's thesis is to answer the question whether Brexit has negatively or positively affected the financial markets and why. The first two chapters will present the foundations for this thesis, namely more selective information about Brexit, how and why the vote was made, and also about the financial markets and their importance. Since the UK’s official exit from the EU will take place on March 29th, 2019, it is still unclear what the consequences of Brexit will be. Therefore, the main part will focus on the period before and after the referendum, tracking when Brexit's influence began and how it had evolved over the years. In addition, a brief forecast will be given as to how the UK’s withdrawal might eventually affect financial markets. The three financial markets that will be a subject in this thesis are: the foreign exchange market, the stock market and the government bond market. This bachelor’s thesis will be mainly focusing on the markets inside the UK, as the effects there are expected to be the most significant.
Due to its ambiguity and topicality, Brexit is the subject of many studies and analysis. This work will be based mainly on two studies: "Kiel Institute for the World Economy"'s study by Raddant, and "Deutsches Institut für Wirtschaftsforschung"'s study by Caporale et al. Through descriptive literature research and analysis of scientific literature, newspaper articles and government reports, will be examined how and why Brexit has influenced the markets in one way or another. The argumentation will be supported by daily observations of the GBP/USD, GBP/EUR, FTSE 100, UK EPU and 10-Y UK Gilts in the period between January 2016 and June 2018, as well as by self-created graphics based on these observations.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Definition and Reasons for Brexit
- Definition and Importance of Financial markets
- Currency market/Foreign exchange market
- Stock market
- Government bond market
- Influence of Brexit on the Financial markets
- Before the Referendum
- After the Referendum
- Influence in 2017
- Influence in 2018 and Forecasts
- Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This bachelor's thesis aims to analyze the impact of Brexit on financial markets, specifically focusing on the foreign exchange market, the stock market, and the government bond market within the UK. The study investigates whether Brexit has had a positive or negative effect on these markets and explores the underlying reasons for this impact. It examines the influence of Brexit on the markets before and after the Referendum, tracking its evolution over the years and providing a brief forecast of future implications.
- Impact of Brexit on financial markets
- Analysis of the foreign exchange market, stock market, and government bond market
- Influence of Brexit before and after the Referendum
- Forecast of future implications of Brexit on financial markets
- Examination of the underlying reasons for Brexit's impact
Zusammenfassung der Kapitel (Chapter Summaries)
The introductory chapter lays the groundwork for the thesis, presenting the historical context of Brexit and highlighting its significance for the financial markets. It explains the reasons behind the UK's vote to leave the European Union, emphasizing the uncertainty surrounding future relations and the potential risks for the financial markets, particularly for the UK's financial services sector. The second chapter delves into the definition and importance of financial markets, specifically exploring the currency market, the stock market, and the government bond market. This chapter provides essential background information for understanding the subsequent analysis of Brexit's influence on these markets.
The following chapters focus on analyzing the impact of Brexit on the chosen financial markets. The chapter "Influence of Brexit on the Financial Markets" examines the effects of Brexit on these markets before the Referendum, after the Referendum, and in subsequent years. It investigates the specific influences observed in 2017 and 2018, providing a detailed analysis of the evolving impact of Brexit. The chapter concludes with a forecast of how the UK's withdrawal might ultimately affect financial markets.
Schlüsselwörter (Keywords)
The primary keywords and focus topics of this thesis include Brexit, financial markets, foreign exchange market, stock market, government bond market, currency, stock prices, bond yields, economic policy uncertainty, and financial services sector. These concepts serve as the foundation for the analysis of Brexit's impact on the UK financial markets.
- Citar trabajo
- Andrea Büger (Autor), 2018, The Impact of Brexit on Financial Markets. An In-Depth Analysis of the Foreign Exchange, Stock, and Government Bond Markets in the UK, Múnich, GRIN Verlag, https://www.grin.com/document/1437197
