Morning Markets: The rollercoaster rocks onwards
- Eurozone: Euro-Coin Indicator (0730 GMT)
- Eurozone: Consumer Price Index (0900 GMT)
- US: Initial Jobless Claims (1230 GMT)
As European traders hit their desks this morning global financial markets remain engulfed by the cloud of uncertainty unleashed by the UK's fateful decision to quit the European Union. Wall Street logged decent gains on Wednesday and Asian bourses followed suit with nice bounces recorded in the leading indices there too. But that positive sentiment withered shortly before the European open and the spasms of post-Brexit anxiety re-emerged with a vengeance.
Sterling, which had otherwise held up nicely overnight and was as far as 0.3% up on the dollar early in the Asian session, took a hit and tumbled back to $1.3385. One week after British voters took to the polling booths nobody has any notion of when this rollercoaster might cease its giddying activity. So brace yourselves. It's shaping up to be another confusing day.
On the political front, the EU leaders seem to be hardening their stance versus the UK, having rejected David Cameron's assertion that they collectively brought this mess upon themselves by a ham-fisted approach to the migration crisis. In consequence, Brussels is digging in its heels and refusing (so far, at least) to countenance any concessions to their British colleagues.
Elsewhere, the gods of good fortune are smiling on crude oil which spiked some 2% late yesterday afternoon on news of a far larger than expected decline in US inventories. While some of those gains were retraced overnight, the black stuff remains strong with Brent above the $50 level and WTI hovering nearby. Crude oil thus seems a lone pocket where focus is on the fundamentals and not the Brexit fallout.
- Consumer confidence in the UK remained soft in June with an index score of minus 1
- Oil rebounded from its post-Brexit falls, helped by lower US inventories
- US crude closed at $49.51/barrel after jumping more than 4% overnight
- Overnight gains on Wall St gave investor sentiment a lift in Asia
- Optimism caught in Japan as well, with a surge in the Nikkei 225
- At 0530 GMT, it was up 0.56% to 15,653
- China’s economy showed new strength in Q2, according to the latest China Beige Book
- Services and construction helped spur the return to moderate growth
- New Zealand residential building consents declined 0.9% in May
- Business confidence in NZ rose to a six-month high in June
- Australia's private sector credit rose 0.4% in May; forecasts called for a 0.5% gain
- The S&P/ASX200 spiked higher, driven by the Wall St rally and financial year-end
- At 0530 GMT it was up 1.6% to 5226
- The US dollar firmed slightly against the yen; it was worth ¥102.6365 at 0142 GMT
- Rises for crude oil and copper gave commodity currencies a lift
- The Australian dollar made gains; it was worth 0.7442 at 0142 GMT
From the Floor
Post-Brexit limbo. "It's a very confusing set of circumstances," says Hardy.
Banking on Britain. “Brexit is not a solvency risk for UK banks,” says Boye.
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
The initial jobless claims release due out in the US today should deliver some welcome relief to a financial world battered by the fallout from last week's Brexit vote, says James Picerno.
WTI prices have gained ground, but the bullish sentiment may not last, as this year's US crude drawdowns are well below last year's, and storage levels are higher, says Michael O'Neill.
The UK hopes to put good market access deals on the table before the exit process kicks off, but EU leaders won't negotiate until Article 50 is triggered, says the team at CNBC.
Leaders who learn from Brexit and make changes to allay globalisation fears could win over voters and move nations forward, say academics and economists in this CNBC article.
Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
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