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Brexit - Won't Somebody Think of the Money Markets?

A gauge of stress in the financial system has remained relatively immune to Brexit risk - so far.
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Photographer: Jasper Juinen/Bloomberg

U.K. voters seeking to gauge the impact of a potential 'Brexit' on the economy could be forgiven for not having turned their minds to the money markets - yet.

While the spread between the interbank lending rate known as Libor and the overnight indexed swap rate (OIS) — a traditional measure of stress in the financial system — has been oscillating recently, much of the movement has been attributed to changing expectations about the timing of the Federal Reserve's next interest rate hike. But don't discount the potential impact of a 'Brexit' vote on money markets just yet, says Barclays Plc Strategist Joe Abate.