Financial markets may have shown a surprising degree of resilience last week, in the wake of Britain's shock decision to leave the European Union (EU), but analysts believe that the post-Brexit volatility is far from over.
"On the surface, the financial market reaction is undeniably sanguine despite overwhelming uncertainty relating to the road ahead for Britain," said IG market strategist Bernard Aw. "This is disconcerting for me. It seemingly dismissed the gravity of the referendum outcome."
Mr Aw is not hopeful the risk rally seen last week can be sustained, given the "enormous headwinds on the horizon, alongside the political wrangling in Britain, which will fuel the lifespan of uncertainty".
Risk appetite this week, he added, will continue to be "susceptible to swift change in sentiments arising from news headlines".
Many financial markets across the world have recovered strongly since early last week, as central banks signalled they could take steps to loosen monetary policies to cushion the impact of Britain's vote.
On the surface, the financial market reaction is undeniably sanguine despite overwhelming uncertainty relating to the road ahead for Britain. This is disconcerting for me. It seemingly dismissed the gravity of the referendum outcome.
IG MARKET STRATEGIST BERNARD AW
Bank of England governor Mark Carney hinted at the possibility of cutting interest rates as soon as this month to shield the British economy, while the European Central Bank is considering loosening the rules for its bond purchases to ensure enough debt is available to buy, according to euro-area officials familiar with the matter.
On Wall Street last Friday, optimism over American growth and central-bank action helped lift the Dow Jones Industrial Average by 0.11 per cent, while the S&P 500 rose 0.19 per cent to log its best week since November.
US markets are closed today for the Fourth of July holiday.
Closer to home, Tokyo added 0.68 per cent, capping its biggest weekly advance since April, as the yen pared gains amid growing speculation about further easing after Japan's top policymakers and the Bank of Japan expressed concern over the tumult in financial markets.
Singapore's benchmark Straits Times Index gained 5.44 points or 0.19 per cent to 2,846.37 - up 110.98 points or 4.06 per cent for the week - in line with a broader post-Brexit rebound that saw traders rushing in to scoop up bargains.
"What's driving the market is general dovish statements and comments from central banks across the globe and that's giving investors hope that the global economy will continue to grow," Mr Tom Wilson, senior investment manager and managing director of wealth advisory at Brinker Capital in the United States, told Bloomberg.
"The central banks are saying they're not going to let it slip into global recession, and that's causing the most bearish scenario to become less likely."
Traders will be watching closely several key events this week, particularly those involving central banks.
The Bank of England is due to release its financial stability report tomorrow and will follow with a news conference, where questions will likely be centred on Brexit, while Australia is slated to announce a decision on interest rates.
On Wednesday, the US Federal Reserve will release the minutes of its Federal Open Market Committee meeting held in mid-June, which could provide updates on the next interest-rate hike.
The widely watched figures on US non-farm payrolls for June will be out on Friday, as North Atlantic Treaty Organisation national leaders convene for a two-day summit in Warsaw.
In Asia, China will publish data on inflation, foreign exchange reserves and the Caixin services purchasing managers' index (PMI) starting tomorrow. Bank of Japan governor Haruhiko Kuroda will speak at the quarterly meeting of the central bank's branch managers on Thursday.
Singapore is due to report its official and private June PMI surveys from today, and advance figures on the second-quarter gross domestic product, likely on Thursday.
The local market will be closed on Wednesday for the Hari Raya Aidilfitri holiday.