Key overnight events:
- The S&P 500 Index surged as much as 1.4% at the open, only to steadily give back gains, ending 0.6% higher to register its biggest advance since 25th May. Consumer discretionary, industrial and technology shares led the charge. In Europe, the Stoxx Europe 600 Index rallied 3.7% for its biggest gain since February after the weekend’s UK EU referendum poll.
- The US dollar continued to weaken as the Blomberg Spot Dollar Index retreated 0.6% overnight for its fourth consecutive day of decline. The pound extended gains this morning, rising a further 0.7% to 1.4720; it has strengthened more than 4% since last Friday.
- An ORB/Telegraph Brexit poll released last night showed Leave’s 1-point lead has vanished, with Remain now up by 7 points. Oddschecker data show less than 30% odds of a Brexit, down from 40% at the close last Wednesday.
- Crude oil futures expiring in July climbed 2.9% to $49.37/bbl, as the dollar weakened. Production and inventory data in the US is expected to show a drop of 1.5 million barrels last week.
- Spot 1.3427
- USDSGD remained steady today after yesterday’s 0.4% drop. The currency pair declined 0.2% earlier today to a low of 1.3420, its lowest level in seven weeks.
- Spot 0.7474
- AUDUSD is poised to extend its positive streak into its third day as the currency pair climbed 0.5% to 0.7487 on the back of a weaker US dollar and firmer commodity prices.
- 1Q house prices rose 6.8% from a year earlier, less than the estimated 7.5%. House-price growth, driven by Sydney and Melbourne, is expected to begin easing in coming quarters as regulators’ curbs on lending to investors begin to bite.
- RBA’s June minutes showed the central bank saw domestic economic data as generally positive and said inflation is likely to remain low for some time.
- Spot 1.2789
- Wholesale trade sales rose 0.1% from a month earlier, less than the 0.5% rise expected, although the increase was the first after two consecutive monthly declines.
- USDCAD fell as much as 0.4% this morning to 1.2773, extending its three-day decline to 1.8%.
- Spot 6.5849
- The PBOC strengthened its CNY fixing for a second day. USDCNH declined 0.1% to 6.5828 earlier today, its lowest level in more than a week.
- Billionaire Li Ka-Shing has warned against Brexit, and reiterated his view that China’s long-term outlook remains bright, citing the country’s huge trade surplus.
- Spot 8.2837
- USDNOK declined to a one-week low of 8.2293 earlier in the session before paring back most of its losses.
- Further strengthening of crude oil prices could drive USDNOK lower, with the first near-term support coming in the form of its 50-day moving average of 8.2297.
- Policy makers in Oslo on Thursday, the same day as the UK votes on Brexit, are expected to keep their benchmark rate unchanged at a record low 0.5%.