Morning Markets: Istanbul attacks, Brexit leave markets on edge
- Germany: Gfk Consumer Climate (0600 GMT)
- US: Personal Income & Spending (1230 GMT)
- US: Pending Home Sales Index (1400 GMT)
Yesterday's trade saw a measured degree of risk-on return to markets following the turmoil that came in the wake of last week's Brexit vote. The pound made gains at the expense of safe-havens such as the yen and gold, while commodity and emerging market currencies also rose.
Today's open is in question after a tragic, Brussels-style attack at Istanbul's Ataturk airport left 36 dead and injured many more. Today's German consumer climate print at 0800 GMT and the US personal income and spending report at 1230 GMT, as well as US personal home sales figures at 1400 GMT will attempt to see financial markets return to a focus on fundamentals after much politically influenced volatility.
The German data will not reflect the post-Brexit uncertainty; for that, we will have to await the numbers for July and beyond. Nevertheless, today's print may provide a baseline – particularly as the numbers are not expected to show any major changes – against which the impact of the Brexit will later be measured.
The US prints, meanwhile, may give some direction to a USD that has been trading along a safe-haven curve of uncertain durability; eventually, our thinking goes, a strong directional factor from within the US economy may skew the USD versus the majors in a way that reflects more than Brexit uncertainty.
Finally, we are seeing a bounceback in crude that arrives in tandem with the green ink flowing into Asian bourses. It may not yet be time for a "new normal" to assert itself, but when it does, it will likely be based on the macro data put forth by the US and EU economies.
- Dozens reported dead after explosions rocked Turkey's largest airport
- Japan's retail sales fell 1.9% in May from a year earlier; minus 1.6% was expected
- Asian markets opened higher, following yesterday's turnaround in Europe and the US
- Australia's new-home sales fell 4.4% in May; the second consecutive month of falls
- Gold fell from an almost two-year high, sliding 1% to $1,311.79/oz
- Copper advanced to its highest in seven weeks, erasing losses following the UK vote
- The yen weakened against the dollar following the pullback in safe-haven assets
- GBPUSD ascends overnight, drops sharply around 0530 GMT to 1.33 area
- EURGBP spikes sees prices rise to over 0.8310
- USDCAD rallies north of 1.3020
- EURUSD consolidating around 1.1055 after Asian session gains
- USDJPY drops to 102.25 area
From the Floor
Different paths. “There is an interesting divergence between the Vix and gold which is holding up”, says Van-Petersen.
Follow or not. “We have quite a bounce in risk appetite but not much follow through into forex”, says Hardy.
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
The effects of Brexit remain unclear and are unlikely to show up in today's Gfk Consumer Climate update for Germany, which James Picerno writes, is expected to remain steady.
ASX200 is expected to see gains in coming weeks because of the strong probability of bullish momentum divergence, writes James Woods
Australia's election this Saturday is merely a sideshow to the main event for AUDUSD: the Reserve Bank of Australia’s policy review meeting next Tuesday, says Max McKegg.
After two days of heavy losses, European equity markets rose overnight and USDJPY rallied 0.7%, write the Saxo APAC Sales Trading team.
The Brexit vote does not only threaten the integrity of the EU, but also that of the UK as Scotland and Northern Ireland seek referenda, writes Stephen Pope.
Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
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