It is an understatement to say that global market participants are focused on Thursday’s (June 23) Brexit vote.

What is Brexit?

The United Kingdom European Union membership referendum, which some refer to as the EU referendum or Brexit referendum, where United Kingdom (U.K.) voters vote on staying or leaving the European Union.

Talk about market, political, social, and regional unknowns

The outcome of the Brexit vote (for or against) is unknown and a vote for the United Kingdom to leave the European Union has huge known and unknown near term market impacts.

No matter the outcome of the Brexit vote European Union leadership face some heavy economic, political, and social lifting to keep the European Union from unraveling. Whether the U.K. stays or leaves, a business as usual approach by European Leadership is sure to fail as growing economic challenges, separatists’ movements, and social unrest throughout Europe are gaining momentum.

The week of June 20 is filled with economic uncertainty for market participants around the world. On June 15, the Bloomberg Brexit Poll Tracker showed 44 percent want to remain in the EU, 47 percent wish to leave, and 9 percent are undecided. Obviously the undecided will likely decide the outcome.

Immigration and national sovereignty are key issues that are at the top of the ‘EXIT the EU’ group list and are key issues for more European member countries in their consideration to exit or stay in the EU. The fear is if Britain votes to leave the European Union, contagion will set-in and a number of other EU countries may also vote to leave.

Interestingly, if Britain votes to leave the European Union no one really knows the mechanics of the process of leaving. Understand, no country has ever left the European Union.

The ballot is very straight forward. Do you want to leave the EU? Do you want to remain in the EU?

A country that votes to leave the EU is free to leave the European Union family two years after the decision is made.

Why all the market anxiety this week, since it will be two years before the U.K. is officially not part of the European Union?  

On the one-hand a two-year transition seems like a very long time; on the other hand market participants will immediately start repositioning their portfolios and trades, and of course that process has already started. Front and center will be currency trades in the Pound, Euro, U.S. Dollar, etc.

Markets hate uncertainty so consider:

Near term market impact

A vote to stay in the European Union would basically have analysts focused on fundamentals, technical indicators, and the increasing impacts of fiscal and monetary policy on markets across the board.

A vote to exit is where market participants start to scramble. One scenario: near term the Euro would strengthen against the Pound and Dollar. If the Dollar broke support, one could make an argument given the current global economic and fiscal and monetary policy setting that rice, cotton, soybeans, corn, wheat, and oil could likely have an additional price leg-up in near term price activity. The bull market in U.S. treasuries would continue and likely set the stage for a U.S. equity market breakout. All of this suggests firmness to strength in land values.