Spreadex Market Update
Bank of England Brexit warning looms as Vote Leave attacks Carney
Pulling back from its morning nadir to settle at an admittedly still poor 0.7% decline the FTSE at least received some good news in the form of its latest retail sales reading. Though the figure did fall month-on-month, May’s 0.9% was far better than the expected 0.3%, while April’s reading was revised sharply higher to a near 2 and a half year peak of 1.9%. This surprise retail boost perhaps explains why the pound hasn’t followed the FTSE’s lead this Thursday, cable down a mild 0.2% with sterling actually taking 0.2% off of the euro. Of course, dependant on how aggressively negative the Bank of England is about a potential Brexit (with Vote Leave’s knives already out for Mark Carney), the UK markets could still see their losses deepen as the day goes on.
Like the FTSE the Eurozone indices stepped away from the edge this morning. The DAX took around a quarter off its earlier decline, while the CAC also managed to stall its more decadent losses as lunchtime approached.
Although one would imagine the Dow Jones was happy about the Federal Reserve signalling a ‘slower path’ for any future rate hikes the reasons Janet Yellen listed for the delay, including not only the potential ramifications of a Brexit but also the weaknesses of the US economy, likely tempered any celebrations. Instead the futures are pointing to another 50 point fall for the US index, one that would leave it under 17600 for the first time in over 3 weeks. Yet the Dow can’t just rest on the anti-Brexit feeling this Thursday; it also gets a data-workout, with the inflation, Philly Fed manufacturing index, jobless claims and current account figures all arriving this afternoon.
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