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Welcome to the world after Brexit: Here's what happens next

CNBC logo CNBC 24/06/2016 Everett Rosenfeld

A majority of British voters said Thursday that the United Kingdom should leave the European Union. Global markets are moving wildly, and currencies are making big moves, but the actually political process will be much, much slower.

First — technically speaking — the referendum is not legally binding. In theory, British Prime Minister David Cameron could ignore the will of a slight majority of voters, and not make any moves to exit the political and economic bloc.

But that is highly unlikely. Assuming Cameron respects the democratic process, he will invoke Article 50 of the Lisbon Treaty, which begins the formal, legal process for leaving the EU.

That would then begin a series of negotiations for how to disentangle the U.K. from the many EU structures to which it is a party, and could take up to 2 years (or more if both the U.K. and the European Council agree to extend the discussion period).

© Provided by CNBC Cameron has said this process would be irreversible.

"We should be clear that this process is not an invitation to rejoin, it is a process for leaving," he said in February, according to reports.

In the more immediate term, markets are going to react in a big way. The Brexit has no historic precedent. No precedent means volatility in markets, probably on a global scale. 

If there's one near-definite result that experts can safely predict around a Brexit, it's that it increases the amount of uncertainty in markets. Market-watchers have predicted a global flight to safer assets — and indeed, that appears to have already begun: Gold futures, the classic safe-haven asset, rose more than 8 percent as of 11:53 p.m. ET.

Asset prices told a story of a shocking turn of events that polls failed to predict and which markets failed to price in correctly:

Equities futures across the globe took a dive, with the Dow implied to open down more than 700 at one point.

Asia was also rocked by the referendum, with Japan's Nikkei index down about 8 percent.

Perhaps the greatest effect from the leave victory, however, was felt in British pound sterling, which plummeted to a 1985 low against the dollar.

The dollar index, meanwhile, rose 3 percent, setting it up for the biggest daily gain since 1978, according to Reuters.

Treasurys also felt the Brexit, with the U.S. 10-year hitting 1.507 percent — its lowest level since August 3, 2012 when the 10-year yielded as low as 1.471 percent.

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