Performance of other index components
The RSM Brexit Stress Index is composed of six components; they include the British pound-euro exchange rate and its volatility, the FTSE 100 and its volatility, the gilt yield spread and the UK corporate bond spread.
The FTSE 100 has now lost 4.25 percent since April 23, most likely on concerns over political outcomes, which were also reflected in this week’s increase in share price volatility.
The fixed income market also began again to price in more concern over the eventual outcome of Brexit and its effect on the economy. The yield on 10-year gilts fell below last week’s level and the gilt spread narrowed over those growth concerns. And this year’s downtrend in corporate spreads was disrupted, perhaps the first signal of an increase in the bond market’s assessment of risk after a lull.In April, the European Union extended Britain’s deadline to depart from the bloc to Oct. 31.