Elections and referendums dominated June, leaving the media, bookies, and voters all puzzled by the results.

• In Australia the Turnbull Government faced a major challenge from Independents and minor parties like Nick Xenophon’s NXT, Bob Katter’s Katter Australian Party, and the resurgence of Pauline Hanson’s One Nation. In the UK, Brits voted 52 to 48 to leave the EU.
• Britain’s vote to divorce the EU after 40 years of marriage was possibly the single biggest influence in the month. The GBP fell to 31 yr lows against the USD, and stocks plummeted. Financials and Home Builders bore the brunt of selling, leaving gold and bonds to rally. European bourses also reacted with Italy, Greek and Spanish stock markets shedding around 12%, and Germany losing around 7% on the day. After the initial shock on the 24th June, markets began to recover leaving European stocks 13% weaker over 12mths, yet the UK market up around 5%.
• China has quietly let the Yuan devalue round 2.4% this year, with the currency trading at 5 year lows. The lower Yuan is worrying trading partners as China is accused of dumping cheap steel, and exporting “deflation”.
• The Brexit vote helped bond prices to hit new highs around the world leaving yields on Australian Government 10yr bonds just under 2%, US Treasuries 1.47%, Japanese Government Bonds -0.24%, and German Bunds going negative at -0.13%. Australia’s (comparatively) high interest rates are supporting the AUD.