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    It’s D-Day and the market is betting on Bremain

    Market Brief

    G10 Advancers and Decliners vs USD
    SEK 0.48
    NZD 0.42
    EUR 0.42
    AUD 0.40
    DKK 0.40
    GBP 0.35
    CAD 0.33
    NOK 0.32
    JPY 0.03
    CHF 0.02
    Global Indexes Current Level % Change
    Nikkei 225 Index 16238.35 1.07
    Hang Seng Index 20865.43 0.34
    Shanghai Index 2892.083 -0.46
    FTSE futures 6260 0.14
    DAX futures 10122.5 -0.07
    SMI Futures 7943 -0.06
    S&P future 2088.1 0.55
    Global Indexes Current Level % Change
    Gold 1266.94 0.05
    Silver 17.35 0.5
    VIX 21.17 14.56
    Crude wti 49.14 0.02
    USD Index 93.5 -0.23

    Finally, the Brexit referendum has arrived. After months of debate, UK voters will finally head to the polling stations this morning to determine whether the United Kingdom should remain within the European Union. For now, the latest YouGov poll shows that the “Remain” camp is leading with 51% of voting intentions and 49% for the “Leave” camp. The market is also very optimistic regarding the outcome of today’s vote, pushing the pound sterling to its highest level so far this year. GBP/USD reached 1.4844 in the early Asian session as traders are betting that UK voters will decide to stay within the union.

    Overall, even though the market seems confident, there is no euphoria as market participants realise that the vote is going to be a close call. Most G10 currencies extended gains in Tokyo with the exception of safe haven currencies, such as the Swiss and the Japanese yen, which were mostly treading water overnight. USD/JPY dropped to 104.04 in Tokyo but quickly bounced back to 104.40.

    USD/CHF will continue to consolidate between 0.9551 and 0.96 as the results of the referendum are released from tonight. EUR/CHF ticked up overnight as traders discounted a Brexit. The single currency rose 0.45% against the Swiss franc to 1.0870 after falling as much as 3% since the beginning of the month.

    EUR/USD was one of the best performers among the G10 complex with the currency pair surging 0.42%. On the upside, a resistance can be found at 1.1382, while on the downside the main support can be found at around 1.11 (multiple low).

    Yesterday, data showed that US crude oil stockpile dropped less than expected, weighting on the WTI and Brent crude prices. Futures on the West Texas Intermediate fell more than 3% as US inventories contracted by 917k barrels, while the market anticipated a reduction of 1500k barrels. However, crude oil prices recovered shortly after as the market realised that inventories dropped for the fifth straight week. We expect the continued decrease in inventories to sustain the recovery in crude oil prices; however, given the stabilisation of price around the $50 level, we can now expect investors to begin looking for new opportunities. We therefore will not be surprise to see the number of rig counts increasing again.

    Asian equities are mixed this morning with Japanese equities in positive territory and Chinese ones blinking red. In Europe, equity futures are mostly trading higher across the board. In the US, futures are also blinking green. 

    Today traders will be watching Markit PMIs from France, Germany, the euro zone and the US; initial jobless jobless claims, new home sales and leading index from the US; industrial production from Italy.


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