Spreadex Market Update
IMF Brexit warning and Leave-leading ICM poll spoil pound’s post-UK inflation rise party
Cutting 2016’s global GDP forecasts to 3.2% from the 3.4% stated in January (and compared to 3.1% for 2015), Christine Lagarde struck a concerned tone this Tuesday, specifically highlighting a British exit from the EU as a threat not just to the nation or the region, but the worldwide economy as a whole. Whilst the major indices all looked a bit deflated after the reveal it was the pound that really suffered, looking a world away from its inflation-inspired highs this morning.. To make matters worse the latest ICM Brexit-poll revealed the leave campaign at 45% to the remain campaign’s 42%, causing cable to shift from a 0.5% surge to a 0.3% fall as the day continued.
Despite a 2016-high hitting performance from Brent Crude, which crossed the $43 per barrel mark on hopes of some kind of oil output freeze materialising from next week’s meeting in Doha, the FTSE couldn’t build on the nudge in the right direction provided by its swelling commodity sector. Instead, and given its recent performance rather unsurprisingly, the UK index began to shy away from its 6200 resistance level, dipping just under the cap that has suffocated its growth for the past month and a half.
Elsewhere the Dow Jones soon lost the mild growth it had managed after the bell, its morning enthusiasm tempered by a worse than expected rebound from its import prices (rising to 0.2% against the 1% forecast). The Eurozone indices, meanwhile, tipped into the red as the day went on, suffering under the same IMF-inspired gloom as the rest of the markets.
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