CoreMacro

The U.K. vote is a major blow to the cause of European integration. Fears that "others are next" are likely to put upward pressure on peripheral European bond yields, potentially setting the stage for a self-fulfilling debt crisis. Risk assets are likely to recover some of today's losses over the coming trading days, but the risk to equity prices is now to the downside. Investors should assume a more cautious stance.

Equity and Treasury market positioning support the notion of a bounce in risk assets, possibly egged on by dollar weakness.

There are not two possibilities in today's vote, but four: Clear Remain; Narrow Remain; Narrow Leave; Clear Leave. We discuss the distinct repercussions from each.

EM/China oil demand is not as strong as some reputable energy sources have indicated. As and when the oil market shifts its attention from supply cutbacks to subdued EM/China oil demand, oil prices will relapse. Renewed drop in commodities prices and poor growth in EM will weigh on EM risk assets going forward.

The Chinese government is engaging in a difficult balancing act between the imperative of maintaining growth momentum and structural reforms. Policymakers have eased off the gas pedal, but the impact of previous stimulative measures should continue to filter through the economy. Investors should also curb their enthusiasm in assessing China's demand-side countercyclical initiatives.

The Fed has reason to delay the next rate hike until at least September, even if volatility subsides after the June 23 Brexit vote.

The "reflation trade" is breaking down. Brexit risk is partly at fault; the bigger issue is the lack of a global "spender of last resort." Globally, savings must equal investment. The problem is that desired savings are rising and desired investment is falling. Policy is increasingly reflecting this reality: Fiscal austerity is yielding to stimulus, the obsession with fighting inflation replaced with talk of helicopter money/other radical solutions. Bond yields are likely to stay depressed for the next two years, but could then begin to rise much more than current market expectations. We are closing our short EUR/JPY trade.

Three strategies that could win whatever the outcome of Britain's referendum on EU membership. And what to look out for in the final days before the vote.

Special Report

The fundamental reason behind the debt buildup in the Chinese economy is rooted in its high savings and banking-centric intermediation system. It is wrong to focus solely on the liability side of the economy. Viewed from a balance sheet perspective, China's debt situation is much less dire than commonly perceived.

Special Report

The exponential rise in banks' non-standard credit assets has occurred in spite of the government's efforts to contain and regulate it. The government does not have full control over shadow banking and non-large banks. These have become a large part of the credit system. Hence, the assumption that the central government in Beijing can sustain any rate of credit growth it desires is overly simplistic. Short small bank stocks in China.