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  
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: