Energy stocks were punished throughout the day yesterday as crude oil slumped. However, US indexes managed a bounce back with the S&P 500 snapping its 5 day losing streak to finish up 0.31%, the DJIA finishing up 0.53% and the NASDAQ 100 gaining 0.33% in the session. Asian equities followed Wall Street’s lead and traded in positive territory as risk appetite appears to have returned to markets.

In FX, the USDJPY remains above 104.00 after heavy selling in the early part of yesterday while the EURSD is trading back at yesterday’s levels after a sharp selloff which was quickly reversed in the later part of the day. The most interesting was the GBP which plummeted to 1.4000 against the USD, only to see strong buying power re-enter the markets, driving the GBPUSD back above 1.4250 allowing some participants a healthy risk reward ratio going into BREXIT week.

In commodities, crude continues to slide as it posted losses of just shy of 4% while gold gave back over 40 USD after topping out at 1315 as risk sentiment returned given the BREXIT vote date might be delayed after the death of MP Jo Cox, who was gunned down in protest to the upcoming BREXIT vote, with both the remain and leave campaigns agreeing to suspend activities today.

With the BREXIT vote being the next major risk event for markets we expect any news regarding the vote, especially the BMG releases of its polls, which were originally due yesterday but where delayed for today, to be the main driving force of markets with a leaning towards leaving to dampen risk sentiment- sending safe haven JPY and GOLD higher while punishing the GBP and EUR against their counterparts and vice versa should the polls show the remains in the lead.

Today`s expected economic data is as follows:

CAD

  • Core CPI m/m expected at 0.3%
  • CPI m/m expected at 0.5%

USA

  • Building Permits expected at 1.15M
  • Housing Starts expected at 1.15M

EU

  • ECOFIN Meeting
  • ECB President Draghi due to speak