Bullet Report | Stocks & oil rally 3% as Polls show UK to remain

Posted On 21 Jun 2016

Tag: CHF, Crude Oil, FTSE 100, GBP, Gold, JPY, USD

While the main focus remains the main event of the week, market participants will turn their eyes to Janet Yellen testimony to Congress today. Yesterday, financial markets enjoyed a steep rally which was fueled by polls suggesting UK is more likely to remain in the EU, with 2 days to go for the referendum.

Currencies: Weekend polls reflected a shift in sentiment away from Brexit. Specifically, an opinion poll by Survation for The Mail newspaper on Sunday indicated the “remain” side at 45%, versus 42% for “leave. The GBPUSD jumped to $1.4720 from $1.4359 late Friday in New York. Sterling was on track to mark its largest one-day gain since 2009. GBP remains the strongest major currency so far, followed by commodity currencies. JPY and CHF are the weakest as risk aversion receded, followed by USD.

Stocks: U.K. stocks charged higher Monday after polls showed a resurgence in support for the U.K. staying in the European Union ahead of Thursday’s Brexit referendum. The FTSE 100 rallied 3% to close at 6,204, marking its biggest one-day percentage gain since mid-February. Japan’s Nikkei Stock Average was up 1.2%, Australia’s S&P/ASX 200 rose 0.2%. Germany’s DAX 30 leapt 3.4% to 9,962.02, and France’s CAC 40 jumped 3.5% to 4,340.76.
Oil and Gold: Oil prices rose overnight, pushing Brent back above the $50 threshold as polls showed more British voters in favor for their country to remain in the bloc. Analysts said that while a Brexit may not have an immediate impact on oil, the market could suffer collateral damage. A departure could hurt appetite for riskier assets such as commodities. Oil could also take a hit from a rising USD, which analysts expect to strengthen if the U.K. votes to leave. On the other hand, GOLD dropped for the second straight session as the appetite for riskier investments due to the optimistic polls, hurt the yellow metal.

As a reminder: At easyMarkets, trading conditions will remain as they are for Brexit making us the only broker transparent and fair enough to pass these conditions to you.

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