The prospect of further cuts in interest rates and bond-buying to support a fractured global economy kept stock markets on the up in Europe and Asia and drove U.S. and European government bond yields to their lowest in years. As Grace Pascoe reports, it follows signs the world's big central banks will go even easier on monetary conditions.
A week on from the UK's vote to leave the EU And markets are beginning to come to terms with the decision - at least that's how it appears. European and Asian stock markets on the up - thanks to the increased probability of central bank easing. (SOUNDBITE) (English) RABOBANK, SENIOR FX STRATEGIST, JANE FOLEY, SAYING: "The reason why central banks may have to react to Brexit is because ...there is risk that it will afterall have a very detrimental impact on global growth. And that of course is not something to be celebrating with risky assets." European markets rose for the fourth straight session But still remain below pre-Brexit levels. The biggest movers - bond yields. Sinking to near record lows in the U.S. and Europe. (SOUNDBITE) (English) RABOBANK, SENIOR FX STRATEGIST, JANE FOLEY, SAYING: "The depression that we have seen in bond yields perhaps that is making equities look a little bit more attractive. Now aside from that of course we have had a lot of pressure on sterling, we have seen a lot of volatility in many other exchange rates too." Brexit woes are likely to remain front and centre for a while to come. (SOUNDBITE) (English) RABOBANK, SENIOR FX STRATEGIST, JANE FOLEY, SAYING: "Even when we do know who the prime minister is, then we begin this very messy procedure of identifying first of all when...Article 50 of the Lisbon treaty will be signed and then the proceudres that need to be taken." As well as unease for global markets. Uncertainty is providing a negative backdrop for the pound - it's lost almost 8 per cent of its dollar value since the referendum.