Sterling sinks after ICM poll shows “Leave” camp in the lead

Yesterday’s markets

7th June 2016

  • EUR German Factory Orders m/m
  • USD Fed Chair Yellen Speaks

The latest online ICM poll shows the “leave” camp in the lead with 48%. 43% are in favour of remaining in the EU, and 9% of the public are undecided. These back to back polls have revealed exit voters are surging ahead. GBP/USD is 0.7% lower, currently trading at a three week low. GBP/EUR is also trading lower at 0.5% as the result sparked a quick sell off of the Pound. Brexit fears have continued to be the main driver of Sterling volatility this year. As further poll results are expected to be released up until the vote on the 23rd, high volatility levels will continue. 

Across the pond, last week’s Non-Farm pay rolls dismissed any chance of a June FOMC rate hike. The Non-farm figure almost hit a five year low at 38k pushing the probability of a rate hike this month from 25% to just below 5%. Fed Chair Janet Yellen, spoke yesterday and emphasised that a rate rise remains data dependant. Yellen expressed concern about the recent hiring slowdown. In regards to a rate rise, Yellen said “probably in the coming months such a move would be appropriate”, taking June and possibly July off the table. This dovish comment lead to a slight bout of Dollar weakness shortly after

Today’s markets

6th June 2016

  • GBP Halifax HPI m/m
  • USD Revised Nonfarm Productivity q/q
  • JPY Current Account
  • JPY Final GDP q/q

Early this morning, the Pound increased 1.5% against the Greenback after a suspected “fat finger” on the British Pound caused a bout of unexpected volatility. Markets were left confused after the sudden move, with some speculating that a mistyped transaction had triggered automatic orders to sell or buy currencies to avoid losses. 

No high tier data is scheduled for release today, but results from another EU referendum poll are expected. As last week showed the leave and stay voters almost tied, this release will be watched to see which side has the edge. the final reading of GDP for Q1 will be released from the Eurozone, with expectations for the figure to remain at the current 0.5%.