As a result of the improving “leave” polling, UK Chancellor of the Exchequer, George Osborne, is expected to release further warnings that a Brexit could spark a fiscal crisis. If we leave the EU, investors predict rates will be at levels not seen since the 1980s. The “remain” camp have amped up there campaign and will continue to invoke the fear factor amongst the voters. High levels of volatility are expected leading up to June 23rd.
In other news, the UK unemployment rate has fallen to 5%, its lowest level since October 2005. The unemployment rate exceeded economists’ consensus by 0.1%. The Average Earnings figure followed suit and rose by 2%, with last month’s reading also being revised higher. The bullish readings helped support the Pound early yesterday morning. Across the pond, the Federal Reserve released a statement, followed by a press conference. The main headline was that fewer Fed officials expect the US Central Bank to raise interest rates more than once this year. The dovish Fed have therefore reined in a rate hike path, which therefore weakened the Greenback late yesterday evening.
Today there will be further insight into inflation figures from the US and the Eurozone, as the yearly figure from the Eurozone is expected to remain in deflationary territory at -0.1%. The US Monthly gauge is due to drop to 0.3% from 0.4%. The main focus of the day will be on the UK as the Bank of England are set to release the rate vote and policy summary. As the vote to keep rates on hold is forecast to remain at 9-0, markets will look at the policy summary for further details on how the Central Bank may tackle the Brexit concerns.