Morning Markets: Referendum campaign on hold, GBP up


Watchlist
- ECB speeches (1245, 1500 GMT)
- US May Building Permits & Housing Starts (1230)
Britain's parliament is in mourning after the murder yesterday evening of Jo Cox, a Labour MP who was a prominent campaigner for remaining in the EU and an advocate for the plight of refugee children from Syria. Campaigning by both the Leave and Remain sides has been suspended at least until Saturday.
The murder, by a suspect reported to have shouted "Britain First" as he assaulted Ms Cox, throws the closely-run referendum into disarray with less than a week to go before polling booths open. Markets responded to the atrocity overnight by bidding up the pound sterling on the assumption that the murder might draw voter support away from the Leave side.
Elsewhere, commodity weakness, including sharp declines for gold and oil, pushed the USD broadly higher after US equities closed higher and their Asian counterparts mostly followed suit.
Japan’s finance minister escalated his concern about a surge in the yen, calling for coordination with his counterparts to address what he described as disorderly moves in the currency market, Bloomberg reports.

Market signals
Asian session
- The murder of Jo Cox was seen today as swaying sentiment towards "remain" camp
- The EUR climbed with sterling after odds indicated a reduced chance of Brexit
- Japan's government kept its assessment of the economy unchanged this month
- The Cabinet Office did say consumer prices were "rising at a slower pace"
- Japanese Finance Minister Taro Aso was concerned about " speculative" currency moves
- Business NZ manufacturing for May was 57.1 (it was previously 56.5)
- WTI rose 0.7% to $46.52/barrel, and Brent crude climbed 1% to $47.66/b
- Gold advanced 0.1% to $1,279.70/oz following wild swings overnight
- Asian stocks rebounded from a three-week low - the MSCI Asia Pacific Index was up 0.7%
- The Nikkei 225 rebounded as the yen trend paused - the Nikkeii rose 1.1% at 0510 GMT
- The Shanghai Composite added 0.76% at 0501 GMT, and the Hang Seng rose 0.68%
- The Mumbai Sensex was up 0.53% at 0506 GMT
- The ASX/S&P 200 was up 0.16% at 5162 pints at 0527 GMT
Forex ahead
- GBPUSD strengthened 0.4% to $1.4255, after erasing a slump of more than 1.3%
- In Asian trade JPY was little changed at 104.22 per dollar

From the Floor
Day trader’s dream "The focus from here remains on extreme intraday volatility," says Hardy
Shopping the Nikkei "It's time to buy Japanese equities ahead of the Brexit," says Garnry
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion
1..2..3
The death of a British MP may have stopped campaigning, but the news is all about Brexit, now with the ECB and the IMF chaiming in, says Juhani Huopainen.
Collateral damage
The Swiss National Bank said Brexit “may cause uncertainty and turbulence to increase” in already fragile financial markets. Max McKegg explains why that could be an understatement.
Reining it in
The Bank of Japan’s decision to leave its stimulus unchanged came just after the Fed reined in its projections for rate increases this year, as Saxo's Aussie team reports.
Pole position
There remains one full week to the UK's Brexit referendum, and Saxo Bank chief economist Steen Jakobsen believes that the "move" will be dictacted by the market's net positioning.

Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
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