ECONOMIES Europe

State Street Comments on the Triggering of Article 50

In reaction to the triggering of Article 50, Michael Metcalfe, global head of macro strategy for State Street Global Markets, and Bill Street, head of investments for EMEA at State Street Global Advisors, offer their views.

Metcalfe commented, “The triggering of Article 50 was well anticipated, but the fact negotiations are now live means financial markets may become more vulnerable to commentary from European and/or UK officials as to how well, or poorly, the initial discussions are going. Headline risk is back, if it ever really went away.”

Street commented, “Our expectation is that the trigger itself is a non-event and has been largely priced into the market. In the short-term we may even see a bounce in sterling as investors close out their short positions. The impossibility of mapping out future negotiations prevents any proper pricing today, but the process over the next two years will undoubtedly spark volatility and larger moves in price levels.”

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