Shifting Brexit Momentum

June 14, 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.

Publication source
FxPro information  FxPro reviews

September 23, 2016
Gold rises to critical level on lower-for-longer policy signals
The price of gold extended its rebound modestly on Thursday after the US Federal Reserve provided some key signals on Wednesday that, despite a considerable probability of one Fed rate hike by the end of this year...
September 22, 2016
Moving on from the Fed
The reaction seen in currency markets yesterday to respective central bank policy decisions was instructive of the change in dynamics that we’re seeing. The BoJ enacted a number of changes to its policy regime...
September 21, 2016
Bank of Japan runs out of road
The Bank of Japan delivered a whole heap of nothing at its policy meeting today, although some adjustments were made to its policy framework. If you take the time to read through these measures, then the impression is of a central bank that has largely lost the monetary plot...

FXTM Rating
Orbex Rating
FxPro Rating
FOREX.com Rating
HYCM Rating
OctaFX Rating

TopOption Rating
Banc De Binary Rating
OptionBit Rating
365BinaryOption Rating
IQ Option Rating
Binary Brokerz Rating