Equity markets rebound for a second day

30 June, 2016

Equity markets rebound for a second day

Risk premium continues to unwind on hopes that central banks will adopt accommodative monetary policies amid Brexit uncertainties. Global equity markets rebounded for a second day, led by European markets.

The Singapore market is recovering its post-Brexit losses, with defensive sectors outperforming. Singtel – Singapore’s largest telecom service company – has soared to a ten-month high of $4.13 this morning.

Another sector that outperformed the STI benchmark is Real Estate Investment Trusts (REITs), as the expectation of rate hike from the Fed has dropped to an extremely low level since the Brexit vote. In a low-yield environment, certainty and sustainable dividend payouts will always attract demand from investors.

Commodities
Positive sentiment has spread over to the commodities market, with the front month WTI crude future extending its second-day rally to $49.50 this morning. Last night’s DoE report showed that US commercial crude inventory dropped by 4.05 million barrels, more than the expectation of 2.5 million. This indicates a further improvement in the supply-demand relationship.

The immediate resistance level for WTI crude futures is $50.20, with the next major resistance level around $54.7.

FX 
Sterling climbed for a second day to 1.3429 against the US dollar. In spite of this, ratings agency S&P lowered the UK’s sovereign credit rating from AAA to AA (negative) two days ago. The ‘lack of clarity’ from policymakers and the looming constitutional crisis in Scotland after the Brexit vote could lead to more volatility.
   
In the mid-term, safety assets such as gold, silver, US treasuries, and currencies like the US dollar, JPY and Swiss Franc will continue to be favoured by the market during uncertain times.


Source link  
Sterling drops below 1.2800

The pound has continued to come under pressure in the past couple of days sinking to new 31 year lows around the 1.2800 level against the US dollar and multi-year lows against the yen and the euro as well...

Services PMI in focus as growth

After several days of decent gains European markets slid back yesterday as concerns about the impact of last month’s Brexit vote might have not only on the UK economy, but also the economy in Europe more broadly saw investors indulge in a spot of profit taking...

Asia markets shrug off

Last week proved to be quite a week for stock markets with the FTSE100 posting its best week since 2011, while the S&P500 also managed to post its best week this year...


Europe to open lower as UK politics implodes

Despite a late recovery from the lows last week, European markets had already looked as if they would open sharply lower this morning, after US markets rolled over and fell sharply into their close on Friday, with the S&P500 hitting a three month low...

FTSE set to finish the week higher

European markets have plunged today, after UK voters caught complacent markets on the hop by deciding by 51.9 to 48.1 to leave the EU, in the process delivering a devastating verdict on a poisonous Brexit referendum campaign...

EU referendum in the spotlight

Sterling has soared to five-month high at 1.4810 ahead of the EU referendum today. Is the market over optimistic? The rally of risk assets over the past few days has also indicated that the market is trying to price in a remain vote.


Bremain exuberance shows no signs of waning

While the opinion polls continue to remain mixed with respect to the UK referendum, equity markets appear to be sailing on serenely as we lead up to tomorrow’s vote, and we mercifully enter the final day of campaigning...

Europe to open higher as UK

Despite hitting three month lows last week European stocks managed to stage a late recovery at the back end of last week, and though they did finish the week lower, the late momentum gained is set to translate into a strongly positive start to the new week...

European stocks to open higher

The atmosphere in the lead up to the referendum is reaching fever pitch. Thursday Brexit news started with the unusually stark letter from Bank of England governor Mark Carney to an MP, defending his right to discuss the topic during Purdah...

  


Share: