The end game approaches

22 June, 2016

Markets appear to be free-wheeling into the end of the week as they await the results of the UK’s EU referendum results on Thursday. The issue came up again at Yellen’s testimony on the economy yesterday, with the message largely unchanged from that delivered in the wake of the FOMC meeting last week. So we’re at a stage where policy-makers globally appear to be stalled ahead of the results. Sterling has been steadier after Monday’s surge, with the 1.47 level appearing to be the short-term resistance level. Still, owing to the binary nature of the result, the scope for volatility remains, but given the way things have gone, the market is positioned for a stronger reaction from a vote to leave vs. a vote to remain. The correlation of sterling to the change of remaining as expressed in composite betting odds has been increasing aggressively of late, now near 0.80 on a 2 week rolling basis, from near to zero towards the end of May.

For today, we’re likely to see this steadier tone continue. Sterling is likely to struggle for further gains unless we see a significant change in the polls which appears unlikely at this point in time. The data calendar is on the light side, with just US consumer confidence and existing home sales data later in the day.


Source link  
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...


UK Growth Forecast Lowered

UK Chancellor Phillip Hammond delivered an Autumn Budget that appeared to be somewhat neutral in its content. More sobering was the updated forecast...

Eurozone economy is robust but...

Speaking at the Frankfurt European Banking Congress, ECB President Mario Draghi, commented that although the eurozone economy was robust...

Trump: Jobs, jobs, jobs!

Data released on Friday showed US job growth accelerated in October after hurricane-related disruptions in the prior month, but a sharp retreat in average earnings and an increase...


UK Interest Rates in Focus

The Bank of England is widely expected to raise UK interest rates for the first time in 10 years today. An expected 0.25% rise, to 0.5%, will push...

Strong US Q3 GDP Boosts USD

The US Commerce Department released Q3 GDP data on Friday, showing the US economy expanded at an annual pace of 3%. With the back-to-back...

So, Who Will Be the Next Fed Chair?

The markets are turning their attention to who will become the next Chairperson of the Federal Reserve. President Trump recently commented that...

  


Share: