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  
US FOMC expected to raise rates again

UK Consumer Price Index (YoY) (May) is expected out at 2.5% against 2.4% previously. Producer Price Index – Input (YoY) (May) is expected...

PMI expected to weaken further

UK Construction PMI (May) will be out with an expected headline number of 49.7 from a prior number of 52.5. The consensus is for a drop in the numbers...

BOE Expected to Keep Rates at 0.5%

UK Industrial Production (YoY) (Mar) is expected to be 3.1% against a previous 2.2%. Industrial Production (MoM) (Feb) is expected to be 0.2% against...


Consumer Price Index Takes Centre Stage

UK Budget Report will be released. This is a mini-budget and outlines the government’s updated budget for the fiscal year, including infrastructure...

US earnings hit sweet spot for markets

The US Nonfarm Payrolls data released on Friday showed a strong increase in job creation and, combined with the lower than expected increase...

Bank of Japan interest rate decision

The Bank of Japan Interest Rate Decision was as expected and left unchanged at -0.1%. The Japanese 10-Year JGB yield target is around zero percent...


Oil Gains and GBP Stumbles

On Tuesday, the American Petroleum Institute said crude stocks in the United States fell by 7.4 million barrels last week. That is almost twice...

Geo-Politics will be the focus of the week

This week will be dominated by Geo-Politics as the US Tax Bill needs to be reconciled between the Senate and House, whilst UK Prime Minister...

Positive Economic Data for Euro and UK

Data released on Thursday from Markit Economics showed eurozone’s thriving economy powered ahead in November, with new manufacturing orders...

  


Share: