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  
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...

Interest Rates in Focus

On Monday, at a speech at the International Monetary Fund in Washington DC, Bank of England Governor Mark Carney stated that any increases in UK interest rates in the future will be both...

US Data Fails to Impress

On Friday, the US Commerce Department released Retail Sales showing a drop of 0.2% in August, the biggest decline in 6 months. The markets had expected...


A Stronger Picture for the UK?

North Korea fired another missile over Japan into the Pacific Ocean on Friday. The regimes defiance towards recent UN sanctions has had a mooted effect...

Risk-On Sentiment Improves

A degree of risk-on sentiment returned to the markets on Monday and in early Tuesday trading. The economic impact of Hurricane Irma, now...

Harvey Impacts US Unemployment

The US Department of Labor released Initial Jobless Claims (Sep 1) on Thursday that showed the impact Hurricane Harvey has had on US unemployment...


Harvey To Impact US Economic Growth?

Tropical Storm Harvey caused extensive flooding along the US Gulf coast over the weekend and markets are evaluating the damage caused to US oil...

Markets Look to OPEC

As OPEC began its 2-day meeting in Abu Dhabi on Monday, to align its members to adherence to output reductions, data from S P Platts revealed that Libya and Nigeria pushed OPEC crude...

BoE Lowers UK Growth Forecast

The Bank of England kept rates at their record low on Thursday, following their latest Monetary Policy Committee meeting. However, the BoE cut forecasts...

  


Share: