Shifting Brexit Momentum

14 June, 2016

The latest polls ahead of the UK EU referendum have given a more convincing lead to the ‘leave’ camp, which has weighed more heavily on sterling during Asia trade. The Sun newspaper, the most read in the country, has also come out on the side of ‘leave’, providing further momentum to the campaign. Cable has pushed down to the 1.4150 level once again (briefly touched yesterday), whilst EURGBP is gearing up for a test of the 0.80 level. UK stocks are opening lower, although for now broadly line with other indices. As I talked about yesterday, the Brexit vote is causing a general risk averse tone across markets, which can be seen not only in stocks but also commodities, such as gold. Bonds are also seeing yields move every lower, with the German 10 years finally moving into negative territory in early trading. UK bonds are also reaching new cyclical lows. It’s difficult to see this trend reversing before the vote next Thursday, so expect more of the same over the coming days.

We see UK CPI data in the UK today, where the headline rate is seen nudging up to 0.4% (from 0.3%). This will be a very minor sideshow compared to the Brexit sentiment. Of more interest will be the BoE decision later this week, together with the accompanying minutes. No change in policy is anticipated, but as always the minutes will be scrutinised, especially for anything more on the impact of a possible Brexit vote on the economy. In a heavy central bank agenda this week, the two-day FOMC meeting starts today, but the ability of central banks to provide any support for markets, or even add to a ‘risk-on’ tone is very limited at this pointed in time.


Source link  
Bank of England Faces Conundrum

On Wednesday, data released by the UK Office for National Statistics (ONS) showed average weekly earnings (excluding bonuses) rose...

UK Inflation at 5-Year High

The likelihood of a rise in UK interest rates, for the first time in a decade, gained momentum on Tuesday as UK CPI edged up from 2.9% to 3.0%...

US Inflation Disappoints

US Consumer Price Index data was released and failed to impress the markets. With US gasoline prices spiking, following the disruption caused by the recent Hurricanes...


Can CPI Follow PPI Lead?

In early Friday trading, the markets are relatively static as they wait, in anticipation, for today’s US inflation data that will potentially give confirmation...

Fed Minutes: Inflation Conundrum

USD broadly declined as the markets digested the release of last month’s FOMC meeting minutes. Many FOMC Members are still concerned...

UK output data falls but expectations rise

On Sunday, The Confederation of British Industry released their monthly indicator of output for UK manufacturers, retailers and service companies...


US Economy Growing Faster Than Forecast

Data released on Thursday indicated that the US economy grew at a faster pace in Q2 than expected. The US Commerce Department released...

New Fiscal Year Could See Changes

With many countries entering a new fiscal year in October, many investors are summarising this past year’s portfolio performance while setting new goals...

New US data did not add positive

Published data on construction activity in the US in August slightly exceeded expectations. The number of building permits reached...

  


Share: