Pausing to Reflect

17 June, 2016

After the tragic events in the UK yesterday, there was a dramatic change in tone in the political environment with one week to go before the EU referendum. This was also reflected in markets, with campaigning on both sides having been suspended for the coming days. It’s a pause for reflection on what was a relentless push towards shedding risk in markets over the past week. For now, this has resulted in a sharp reversal in sterling, less so in other risk correlated assets such as the yen and Swiss franc. We’ll have to wait until Monday for the sand to settle enough to gauge the lasting change in sentiment towards the referendum.

Japan’s Finance Minister Aso upped the rhetoric on the yen overnight, pointing out “We have to monitor moves with a sense of urgency so that speculative moves won’t continue”. More pointedly, he continued “when needed, I’d like to take firm action in line with G7 and G20 agreements”. I talked yesterday about the increased helplessness of central bank and it also appears true of finance ministers, with the yen only marginally weaker on the back of his comments. US inflation data is seen later today, but the reversal in tone is likely to remain in place and investors are more likely ease into the end of the week before next week takes hold.


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: