Monday, June 27: Five Things the markets speak of
Voting UK to leave the EU will obviously dominate the summits of European leaders and global central bankers this week.
Starting today, central bankers meet to during a three-day meeting in Portugal. What many may have considered a boring topic "The future of the international monetary and financial architecture" should be given rather about the impact on financial markets after the shock of last week to vote 'Brexit' . Not sure that Governor Carney BoE will have time to fulfill its commitment to the floor because of the need for all hands on the ground to bridge the confidence of investors in Britain.
on Tuesday, heads of government of EU member countries will meet for a two-day meeting of the European Council in Brussels. will it be an amicable divorce or bitter to the UK? EU to where it has never gone before. Will they be able to come away with a new roadmap for Britain?
on Friday, the first day of July marks the initial release of global manufacturing data for the month of June - ISM, China, Japan, US and much of Europe.
1. Pound falls again
It is not surprising to see Sterling (£ 1.3206) begins the week again under intense pressure, dropping -2 1% on the open market (closed Friday £ 1.3661) in another volatile trading session in Asia. The EUR continues to play catch up, down just -0.61% to € 1.1014 outright.
Late Friday, Moody's Investors Service lowered its rating outlook on the U.K. to "negative" to "stable". Early this morning, the Chancellor of the Exchequer, George Osborne, released a statement shortly before the open U.K. markets.
"The Treasury, the Bank of England and the Financial Conduct Authority have spent the last few months to establish solid contingency plans for immediate financial result if this result," said M . Osborne. His comments were only able to give a provisional temporary boost to the book.
with the lack of clarity in the UK has been able to undermine market confidence. at the time current, market conditions remain somewhat fluid, with dealers noting currency volumes above expectations across the board. the demand for safe-haven currencies like the yen and the "big" dollar remain on fire trade currently.
China weakened its yuan fixing by the most since last August 1 fixing the PBoC since Brexit set the parameter to its lowest setting in six years near yuan. the yuan onshore last traded 0.4% lower at ¥ 6.6388 outright.
The UK faces a vacuum at the highest management level -. Conservative David Cameron resigned on Friday and Labour leader Jeremy Corbyn saw 12 members of his shadow cabinet resign after losing faith in their leader
2. euro markets pressured by Brexit
central banks remain on alert and continue to be front and center. Their goal is to instill calm and market confidence in the global financial system.
Their presence in the Asian open overnight provided a modest rebound in Asian equities. However, the bitter aftertaste continues in Europe for the U.K. the vote to leave the EU is again pressure their regional exchanges.
The Stoxx Europe 0 fell 1% in early trade as investors considered increasing political and economic uncertainty around the U.K. and Europe. Amid the losses, however, IBEX 35 Spanish rallied 3% after the Popular Party of Prime Minister Rajoy has done better than expected during the national elections on Sunday (elections delivered a Parliament suspended for the second time in six months).
In Asia, stocks managed a modest rebound after heavy losses Friday (Asia bore the brunt of the negative vote of U.K.). The Nikkei Stock Average gained 2.4% after a counselor PM Abe suggested that Japan now has a "little field" to streamline the intervention on currency markets. The Shanghai Composite Index has added 1.5% after the PBoC has weakened the yuan by the most since August, even as Hong Kong shares edged down 0.5%.
US stock-index futures indicate more problems for action on opening a session after worst selloff in the S & P 500 in ten months on Friday
Indices. Stoxx 50 -0.6 % in 2763, -1.0% in 6077 FTSE, DAX -0.9% in 9473, -0.8% CAC-40 in 4073, IBEX-35 + 0.3% in 7808, -0.4% in FTSE MIB 15,658, SMI -0.3% in 7723, S & P 500 Futures -0.2%
3. Gold holds its largest increase from day to day four years after Brexit
the "yellow" metal rallied 25% this year with support from two main areas - the Fed holds off on policy tightening and NIRP (rates negative interest) being embraced in Europe and Japan.
Now that the referendum Brexit adds to uncertainty in global markets, speculators and investors also support the gold price.
Bullion for immediate delivery rose 0.9% to $ 1.330 before the open U.S. The metal surged to $ 1,358.54 on Friday. The 8 +% intraday surge was the largest in more than two years. Gold bulls are eyeing a handful of $ 1,400 by year end.
4. How far can the total returns?
During times of uncertainty, investors tend to flock to hold sovereign bonds. The volatility that was always present in stocks and currencies from voting Brexit shocking U.K. has not gone wrong in the bond market.
Product Reference Tier Igovernment is traded as a commodity "hot". The yield of the benchmark 10-year U.S. Treasury was + 1.5% this morning, starting Friday + 1.419% low and down from the previous days around + 1.74%.
The inconclusive result of the Spanish general elections yesterday giving some German bunds. Analysts note that technical factors are also the side of the dike - the bulk of the German curve is now ineligible for purchases of the ECB that trade yields below the deposit rate -0.4%. This forces the ECB to buy longer-term issues, which is only flattening of the German curve further.
The yield on 10-year government bonds in the UK fell below 1% (+ 0.996%) this morning, as investors continued to bet on the rise of BoE monetary stimulus. The yield was negotiated north of + 1.35% ahead of the vote last week.
5. verbal intervention remains heavy in Japan
USD / JPY was off course to test below -0.5% below ¥ 101.50, but still comfortably above the low ¥ 98.98 seen on Friday (November 2013). verbal intervention remains high in Japan, where PM Abe held a meeting with the Deputy Governor of the BoJ Nakaso Aso and Minister of Finance.
Abe said it was essential to fight for greater market stability in uncertainty after the vote Brexit, adding that he gave instructions to "take all necessary measures in foreign exchange markets. "
many dealers are looking for to test JPY ¥ 95.00 before seeing the Bank of Japan (BoJ).
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