Stay or go, the market may produce the same result following the U.K.’s referendum on its European Union membership this week, strategists told CNBC’s “Squawk Box” on Monday.
Markets rallied on Monday as the remain vote closed the gap with the leave camp over the weekend. Fear the U.K. will abandon the EU has weighed on the pound and euro and supported the Japanese yen andgold.
But those Brexit trades may simply unwind no matter the outcome of the vote, according to Joseph Trevisani, chief market strategist at online trading platform WorldWideMarkets.
“The moves that we’ve seen, particularly in currencies, which have been very volatile with this, are going to be reversed whichever way the vote goes,” he said.
If the leave camp wins, the U.K. would not immediately separate from the EU, so the market moves that Brexit fears produced are likely to unwind as investors await the terms of the separation, he said.
David Kelly, JPMorgan Funds global strategist, said a stay vote would certainly be good for assets because it reduces uncertainty and returns markets to the status quo. But he, too, said some market watchers —including Federal Reserve Chair Janet Yellen — might be putting too much emphasis on Brexit.
“If they vote to leave, it’s really hard to know how markets are going to react because there’s been so much negative pressure on sterling, so much negative pressure on global markets,” he said.
It may be that markets have already priced the negative impacts of Brexit into assets already, he said.
“What we could easily see happen is a sort of sell the rumor, buy the fact, where people wake up the next morning and and say, ‘OK, well maybe we’ll be OK here,” he said.
Should the U.K. vote to leave, Kelly does not expect Europe to give it a sweetheart deal. The continent will likely play hardball with Britain on trade terms in order to discourage other members from following its lead.
In the long run, Trevisani said he expects months or years of negotiation to ultimately yield a relationship similar to the one the U.K. and Europe share today because they are both predisposed to continuing that relationship.