Daily Observations:

  • UK leaves the European Union with a 51.9% vote. Initial market reactions:
    • GBP nose-dived this morning by 11% to reach GBPUSD1.3305, the lowest level since 1985.
    • USDJPY broke through the Yen100 level and reached a low of Yen 99.02 before recovering to Yen 102.92 now.
    • Asian stock markets skidded with ASX200 closing down 3.34%, Nikkei 225 closed 7.92% lower followed by TOPIX at minus 7.26%. Singapore’s STI currently down by 2.27%.
    • Euro Stoxx 50 is now lower by 8.3%.
    • US stock futures (DJIA and S&P500) were down by more than 5% earlier and this triggered a limit down trading curb by the US exchanges.
    • Crude oil futures for August 2016 delivery fell 6.8% to US$46.70/bbl before recovering to US$48.18 currently.
    • XAU (gold) rallied to a high of US$1,358.54/oz before retracing to US$1,315/oz now.
  • UK Prime Minister David Cameron has announced his resignation. He will stay on till October 2016 before handing over to his successor.
  • In other news, US jobless claims fell to a 43 year low for the week ended 18 June 2016. Initial claims were 259,000, the largest drop since February of this year. The previous recorded low was 253,000 claims, a 43 year record low reached in March 2016.
  • Staying in the US, Markit’s flash US manufacturing PMI increased to 51.4 in June from 50.7 the previous month.
  • These encouraging signs supported Fed Chair’s Janet Yellen’s statement on Tuesday that the recent slowdown in non-farm payroll gains were “transitory” and that “several other timely indicators of labor market conditions still look favourable”.

Currency Views:


  • Spot 1.3539 after reaching a high of 1.3722 this morning.
  • Singapore’s May 2016 industrial production came in at -0.4% m/m vs estimates of -0.9%
  • Resistance remains at 1.3600 level


  • Spot 0.7396 after making a low of 0.7306 earlier.
  • Odds of a July rate cut by RBA went up 51% post Brexit.
  • Elections are scheduled for 2 July 2016 as Malcolm Turnbull seeks a second term for his Liberal-National coalition.
  • Resistance at 0.7642 with support coming in at 0.7284. A firm break below this mark may see AUD moving to 0.7144.


  • Spot 1.3005 after reaching a high of 1.3099 today.
  • Still range bound between 1.2654 and 1.3187. A move beyond 1.3187 brings CAD towards 1.3311.


  • Spot 6.6380 with a high of 6.6520 today.
  • China’s CNY fixing today was 6.5776 vs yesterday’s lower fixing of 6.5658.
  • EU was China’s second largest trading partner in 2015 with 2-way trade flow of US$564.9billion. Brexit expected to be negative for China.
  • UBS expects USDCNY to quickly move lower to 6.7-6.8 mark. China’s PBOC likely to cut RRR.
  • China’s central bank injected CNY340 billion (US$51 billion) liquidity this week, biggest pump priming since April 2016.


  • Spot 8.4530, high was 8.7291 earlier.
  • The earlier move lower in NOK tracked a more than 5% fall in Brent crude.
  • Norway’s sovereign wealth fund to remain long-term investor in UK despite Brexit.



© Jachin Capital Pte Ltd

UEN: 201419754M

The contents of this document are for information only and is taken or compiled from sources that we, Jachin Capital Pte Ltd, believe to be reliable. To the maximum extent permitted by law, we do not make any representation or warranty (express or implied) that this information is accurate, timely or complete and it should not be relied upon as such. Opinions expressed are our current opinions as at the date of this document only and are subject to change without notice. We endeavour to update on a reasonable basis the information discussed but regulatory, compliance or other reasons may prevent us from doing so. The publication and distribution of this document is not and does not imply any form of endorsement of any person, entity, service or product described or appearing here. This is not and does not constitute or form an offer to buy or sell nor the solicitation of an offer to buy or sell any security or financial instrument nor to participate in any particular trading or investment strategy. We are not soliciting any action based on this document. The information, services and products described or appearing here are intended only for Accredited Investors (as currently defined in the Securities and Futures Act) and are not intended for nor targeted at the public in any specific jurisdiction. This information does not take into account the particular investment objectives, financial situations or needs of individual investors. Investors should seek independent financial, tax or legal advice or make independent investigations as considered necessary or appropriate before making an investment decision. Investments involve risk. Any past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any investment instrument.

Essential SSL