Spreadex Market Update

Brexit fears continue to grip FTSE and pound as The Sun backs Leave campaign




Now sitting at a fresh 3 month low the FTSE slipped by another half a percent this morning, the index gradually threatening to dip below the 6000 mark; the DAX and CAC didn’t fare much better, the former slipping under 9600 for the first time since mid-April.. The pound saw similar sized losses, with cable falling back to the 2 month lows it struck on Monday. The main catalyst for this decline continues to be the dreaded B-word with it looking increasing feasible that on June 23rd the British public could vote to exit the EU.

The latest Guardian/ICM survey has the Leave campaign with a 6 point advantage, with polls from the ORB/Telegraph and YouGov/Times suggesting similar leads for Boris Johnson and co. Perhaps most damning is the fact that The Sun this morning came out in favour of a Brexit with a flashy and trashy editorial on the reason why Britain should quit the EU. The Brexiters have begun to dominate the conversation at the key time, and as shown by the market reaction there is a genuine fear that Europe is on a collision course with history.

In among all this Brexit-angst there is a bit of data to deal with, namely the latest UK inflation reading. Analysts are expecting the figure to rise from 0.3% to 0.4% month-on-month, something that may give the pound a boost but, then again given the strength of the Brexit fears, may not.


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