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  
Eyes on US Retail Sales

Friday May 12th will see the release of a set of crucial US data for April at 13:30 BST; retail sales, retail sales excluding autos, CPI and core CPI....

Fed Expected to Keep Rates Steady

It is reported that Fed Chair Yellen is not due to hold a press...

Will Q1 GDP Show a Recovery?

The UK and the Eurozone Markit Manufacturing PMI for April will be released today at 09:30 BST...


Will US Q1 GDP Growth Show a Slowdown

This will be the first US GDP figure reported after Trump took office...

USD Rallies

Last Friday US non-farm payrolls for March rose by only 98K, which was far below expectations of 180K, marking...

How Will FOMC Minutes Affect USD?

The dollar index hit a 3-week high of 100.59 yesterday. However, it pulled back after testing the near-term major resistance...


EUR/GBP Bulls Retreat Under Resistance

The European Central Bank president Draghi will make a speech at 15:30 BST today...

Second Scottish Referendum Hits GBP

Tuesday evening, March 28, the Scottish parliament has voted by 69 to 59, in favour of holding a second independence...

Brexit Flight: A Hard or Soft Landing?

UK Prime Minister Theresa May will trigger Article 50 of the Lisbon treaty on Wednesday March 29, starting the 2-year Brexit negotiation...

  


Share: