Brexit will force Yellen's hand on rates

Contrary to what the Street says, I believe Brexit will force Fed chief Janet Yellen’s hand to seriously consider raising rates in July.

As the dollar and yen strengthen, while sterling and euro get weaker, the Fed will need to pare back that move with a rate hike to balance capital flows out of Europe.

As pound nears $1.30 to the dollar and the euro hits $1.10, EU officials will be pleading with the Fed to raise as Mario Draghi and Co. fight to keep the continent in tact.

The fact that the US 10-year note is bumping up against all-time lows at 1.47% shows the flight of capital out of Europe, despite the German 10-year bund at -0.1%.

Please keep an eye on the European bank stocks today. This is where the next leg down will come from.

Deutsche Bank is now trading below $14 a share pre-market with both RBS and Barclays halted on 20% equity declines.