Market Roundup
• USD down as GBP, EUR surge on bets UK remains in EU, EM & commodity-linked currencies rise on risk return.
• Wall Street marches ahead as Brexit seen unlikely, oil higher, gold falls.
• Exchanges, brokers prepare for wild ride due to Brexit vote.
• U.S. weekly jobless claims near 43-year low, 259k vs 270k forecast, 277k previous, continuing claims lower as well.
• Markit Jun Mfg PMI flash 51.4 vs 50.8 forecast, output and employment up as well.
• Brazil's Meirelles: current fiscal trajectory is not sustainable in long-term, spending cuts to bring down interest rates.
Looking Ahead - Economic Data (GMT)
• No Significant data
Looking Ahead - Events, Other Releases (GMT)
• No Significant Asia Events
• UK Brexit polls close 2100 GMT
• The first public indication we are likely to get is a planned YouGov survey of people who have voted on the day. These are expected just after 2100 GMT
Currencies Summary
EUR/USD is likely to find support at 1.1266 levels and currently trading at 1.1380 levels. The pair has made session high at 1.1409 and hit lows at 1.1339 levels. The dollar drifted lower against the euro on Thursday after opinion polls indicated that the campaign to stay in the EU was in the lead boosting riskier assets, including stocks, and reduced demand for U.S. dollar, which had rallied on Wednesday on growing fears of a British exit. The euro touched a six-week high of $1.1421 against the dollar, also on the back of increased odds that Britain will remain in the 28-member European bloc. The currency was last up 0.8 percent at $1.1385.Both the euro and pound also rose against the safe-haven yen, which took a beating as traders favored riskier assets. Meanwhile, data on Thursday showed that the number of Americans filing for unemployment benefits fell last week to near a 43-year low, suggesting labor market resilience.Manufacturing activity rose to a three-month high in early June while new single-family home sales dropped last month from a more than eight-year high in April.
GBP/USD is supported in the range of 1.4600 and currently trading at 1.4900 levels. It reached session high at 1.4903 and hit low at 1.4738 levels. Sterling rose against the dollar on Thursday after a series of late opinion polls favored Britain staying in the European Union and the recent rise in the currency built on the growing on belief that Britons will vote to remain in the European Union. An Ipsos MORI poll for the Evening Standard on Tuesday and Wednesday showed 52 percent of British voters would opt to remain, while 48 percent would vote to leave. An online Populus poll showed 55 percent support for staying in the EU. Bookmakers' odds indicated a further shift towards the "remain" camp. Sterling rose to $1.4946, its highest against the dollar since Dec. 31, in early trading. The pound was last up 0.8 percent at $1.4807.
AUD/USD is supported around 0.7520 levels and currently trading at 0.7603 levels. It hit session high at 0.7608 and made session lows at 0.7588 levels. The Australian dollar stayed firm against US dollar on Thursday, as Australian dollar was supported by an advance in oil prices towards $50 a barrel and on optimism that Britain will stay in the European Union. Just a few hours before UK voters begin to cast their votes in a historic EU membership referendum, two opinion polls showed the "Remain" camp ahead of the "Leave" camp. A telephone survey by polling firm ComRes, conducted for the Daily Mail newspaper and ITV television showed the "Remain" campaign had a 48 percent to 42 percent lead over "Leave". The Australian dollar was last trading at $0.7595, having reached two-month peak of $0.7610 earlier in the session.
USD/CAD is supported at 1.2654 levels and is trading at 1.2774, it has made session high at 1.2801 and lows at 1.2671 levels. The Canadian dollar strengthened to a nearly two-week high against its U.S. counterpart on Thursday as increased chances that Britain will stay in the European Union and higher oil prices supported the risk-sensitive commodity-linked currency. A series of late opinion polls favored Britons voting in Thursday's referendum to stay in the European Union and bookmakers' odds indicated a further shift towards the "Remain" camp. Optimism over Britain remaining in the EU helped drive up stocks and oil prices. U.S. crude prices were up 2.1 percent. Gains for the loonie came after domestic data on Wednesday showed retail sales rebounded in April to reach a record C$44.28 billion. Still, the Bank of Canada has signaled that the economy may contract in the second quarter after a solid start to the year as a huge wildfire in Alberta weighs on oil production. Canadian government bond prices were lower across the maturity curve, in sympathy with U.S. Treasuries, as increased risk appetite reduced investor demand for safe-haven assets.
Equities Recap
European shares rose for the fifth day running on Thursday, assisted by firmer banks and miners and expectations that Britain would vote to stay in the European Union.
The pan-European FTSEurofirst 300 ended the day up by 1.22 percent, Spain’s IBEX closed up by 1.7 percent, and Italy’s FTSE MIB finished the day up by 3.7 percent.
The three major U.S. stock indexes rose more than 1 percent each to record their biggest percentage gains in a month as investors grew confident that Britain would choose to remain in the European Union in Thursday's referendum.
Dow Jones closed up 1.28 percent, S&P 500 ended the day up by 1.38 percent, Nasdaq finished the day up by 1.56 percent.
Treasuries Recap
U.S. Treasury prices fell on Thursday on growing confidence that Britain will vote to remain in the European Union, as opinion polls indicated that the campaign to stay in the EU was in the lead.
Benchmark 10-year notes fell 15/32 in price to yield 1.74 percent, up from 1.69 percent late on Wednesday.
Commodities Recap
Oil prices closed 2 percent higher after a volatile session on Thursday, with investors less worried about prospects for the global economy after the last pre-vote opinion polls showed Britain was likely to remain in the European Union.
Brent crude settled up $1.03, or 2.1 percent, at $50.91 a barrel. U.S. crude settled at $50.11 a barrel, up 98 cents.
Gold fell to a two-week low on Thursday as the last sweep of opinion polls before Britain's referendum on EU membership began gave the campaign to stay in the bloc a slight edge.
Spot gold was down 0.3 pct at $1,261.90 an ounce by 2:50 p.m. EDT (1850 GMT), after hitting $1,257.91, its lowest since June 9. U.S. gold futures settled down 0.5 percent at $1,263.10 per ounce.
