Analysts at DeskTrading.Com Comment on the Brexit Uncertainty in the Financial Markets

(MENAFN- GetNews) The UK continues to dominate the headlines in the financial markets following the events of November 15, which saw Brexit minister Dominic Raab quit his post while Environment Secretary turned down the opportunity to replace him. Several other British cabinet secretaries also quit their positions as Brexit negotiations climaxed a head of crucial meeting between PM Theresa May and the UK Parliament.

The market environment has turned so sour against the UK economy in recent days thus sending the Pound Sterling plunging against rival currencies while the FTSE 100 Index remains rangebound on a volatile sideways wedge.

Over the last two weeks, a series of events touching on the UK market have tipped the balance in favor of its close peers with investors taking a keen notice of the dwindling economic numbers, a bleak Brexit outlook, and a cabinet turmoil.

At the start of the month, a Markit Survey showed that consumers were becoming more cautious when spending on high cost products. On the other hand, the PMI manufacturing Index for the country fell to a multi-year low of 51 points a level last witnessed back in 2016.

Regardless of these circumstances, the Bank of England remains adamant that the economy needs tightening and Governor Mark Carney expressed in the most recent economic update that an interest rate hike is likely to happen regardless of the outcome of the Brexit negotiations.

And talking of Brexit, things have spiraled to a new low following Thursday Nov 15, 2018 events that saw several ministers quit their positions, key among them, the Brexit minister Dominic Raab. This threw into tatters any hopes of getting PM May's proposed Brexit deal through parliament. This subsequently has made it even more difficult for the UK to nail down a Brexit deal with the EU with Brussels lying in wait.

In fact, some believed there was higher chance of the country going into a general election than there was taking a good Brexit deal to Brussels. And things intensified when Labour Party leader Jeremy Corbyn asked for a general election should Prime Minister May fail to get her proposed Brexit terms through the UK Parliament.

Eventually, after 20 months of negotiations, European Union greenlighted its divorce from Britain, with a $50 billion payout. The deal will now be voted on by Britain's parliament, whose members have already voiced fierce skepticism.

This clearly puts the whole UK market at a high level of uncertainty going into the end of the year, which creates an interesting scenario for investors looking to take precautionary measures or capitalize on the volatility.

In view of the current situation, has provided an insight on how investors can approach the market.

It is a common view that foreign exchange presents a high level of risk compared to investing in stocks. However, when volatility seems to dictate market movements, it becomes a valuable tool to hedge against a bearish stock market.

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