Morning Markets: June starts on sour note as Brexit polls bash GBP
- UK: Manufacturing PMI (0830 GMT)
- US: ISM Manufacturing Index (1400 GMT)
- US: Light-Vehicle Sales (TBD)
June has got off to a surly start after Asian bourses tracked their US counterparts lower and traders predicted a negative opening for Europe too. In FX markets, participants were upset by two new UK referendum polls that reversed the Remain side's lead over the Brexiteers. The odds that Britain will vote to stay within the European Union dropped in response and sterling took a hammering from its peers.
Japanese equities fell steeply and in China shares failed to build on yesterday's rally. In Australia, falls for leading miners BHP Billiton and Rio Tinto drove down the S&P/ASX200, and even a surprisingly strong GDP result failed to revive the flagging equities market.
It's a light day on the economic calendar so in addition to tracking the latest twists and turns in the Brexit story and monitoring the fallout from Japanese prime minister Shinzo Abe's postponement of a planned sales tax hike, participants will set their sights on Vienna which hosts two important events tomorrow – Opec's semi-annual meeting and the European Central Bank's latest policy-setting get together.
- Opec meets on Thursday to discuss the oil cartel's production policy
- The Nikkei 225 took a dive at the open; it was down 1.62% to 16,955.97 at 0531 GMT
- China's Caixin Manufacturing PMI remained at 50.1 for May, versus 50.0 expected
- China's Non-Manufacturing PMI was 53.1 for May, down from 53.5 in April
- China's Shanghai Composite managed to just edge higher into positive territory
- The Shanghai Composite it was up by a slim 0.08% to 2,918.95at 0553 GMT
- Hong Kong's Hang Seng index was down 0.09% to 20,796.58 at 0505 GMT
- India's S&P BSE Sensex was up 0.64% to 26,839.32 at 0506 GMT
- Australia's S&P/ASX200 took a tumble, driven by falls for the top miners and profit-taking
- The S&P/ASX200 fell from 5320 to 5307 on China's weak non-manufacturing PMI
- The S&P/ASX200 closed down 0.96% at 5,327
- Australia's Q1 GDP growth came in at robust 1.1% versus just 0.8% expected
- The US dollar lost ground against the yen; it was worth ¥110.4900 at 0501 GMT
- Australia's strong GDP figure for Q1 gave the Australian dollar a lift
- The Aussie dollar was worth 0.7277 at 0500 GMT
From the Floor
Stay or go? ”Brexit poll turnaround catapults bunds past 164 resistance,” says Boye
Aussie to fade? “The AUDUSD rally doesn’t look durable,” says Hardy
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
British manufacturing is already in contraction, and a Brexit "yes" result could drive the UK economy into recession, says James Picerno
GBP fell 1.3% after the release of a new Brexit poll favouring the leave camp, writes the team at Saxo APAC Sales Trading
Saudi squeeze strategy
The team at Saxo Capital Markets Australia says a Bloomberg analyst survey suggests Opec is unlikely to reach a deal to trim output; it will stick to the Saudi strategy of squeezing out rivals.
Aussie dollar boost
A surprisingly strong GDP figure for Australia gave the Aussie dollar a boost. And the the Reserve Bank of Australia is unlikely to move on rates until August, says Max McKegg.
Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
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