Global Markets:
- Asian stock markets: Nikkei down 7 %, Shanghai Composite fell 1.20 %, Hang Seng lost 4.60 %, ASX 200 declined 3.60 %
- Commodities: Gold at $1234 (+4.80 %), Silver at $17.71 (+2.00 %), WTI Oil at $47.30 (-5.65 %), Brent Oil at $48.10 (-5.50 %)
- Rates: US 10 year yield at 1.50, UK 10 year yield at 1.383, German 10 year yield at 0.10
News & Data:
- Japan PPI Services (YoY) May: 0.20% (est. 0.10%, prev. 0.20%)
- Chaos reigns in markets as UK vote to Leave EU; GBP/USD -9.5%, USD/JPY -5.5%, HSBC falls 11.3% in Hong Kong, Topix -8%
- ITV and BBC both predict victory for Leave in EU Referendum
- Sterling, stocks in free fall as UK on brink of Brexit – RTRS
- Markets Jolted Worldwide as BBC Projects Brexit; Yen, Gold Jump – BBG
- Japan Finance Minister Aso: Concerned about Brexit impact on markets, will respond as needed
Markets Update:
The British Pound is collapsing after it is now certain the UK has voted to leave the European Union. GBP has declined more than 10 % against the USD and continues to post fresh lows. Further losses seem likely. The Euro is also under pressure and broke below 1.10 earlier.
Meanwhile, the safe havens are benefiting from the risk-off environment, especially the Japanese Yen. USD/JPY traded as low as 98.95 and it took intervention from Japan’s government to stop the decline. Japanese’s finance minister Aso was talking earlier, saying that Japan will respond as needed to sharp FX moves.
The commodity currencies suffered as well, with the Australian Dollar down to 0.73 from 0.7640 earlier and NZD/USD dropping from 0.73 to 0.70. Meanwhile, precious metals have rallied with Gold breaking above $1350 and Silver trading as high as $18.30.
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