Daily Observations:

  • The UK referendum on Brexit takes place later today, with voting starting at 2pm SGT today and closing at 5am SGT on Friday. The first meaningful results are expected to be released 2 to 3 hours after voting closes.
  • Polls that came in post-New York market close depicted a contest too close to call, with two percentage points or less separating both camps. GBPUSD has soared 1.1% to a new 2016 high of 1.4844; sterling has climbed about 5% over the past five days.
  • The S&P 500 Index fell 0.2%, after swinging from gains to losses throughout the session; energy and technology shares paced declines. The dollar weakened overnight, with the Bloomberg Spot Dollar Index falling 0.4% and a further 0.3% in Asia trade.
  • Crude oil futures expiring in August declined 1.4% to $49.13/bbl after US government data showed crude stockpiles shrank by 917,000 last week amid a jump in imports, a drop that was less than energy analysts had anticipated.
  • European Commission President Juncker said Britain’s referendum result will be final and there can be no negotiation on the UK’s continued EU membership should the country vote to leave. Concessions to the UK won’t go beyond what David Cameron obtained from EU leaders at a summit in February, which included tougher restrictions on EU workers claiming welfare benefits and safeguards in financial legislation, Juncker added.

 

USDSGD:

  • Spot 1.3382
  • USDSGD fell 0.3% to 1.3363 this morning, its lowest level in two months.
  • The currency pair is currently close to its 2016 low of 1.3352, and after declining for seven consecutive sessions, could be due for a knee-jerk correction in the near future. Resistance could came in around the 1.3600 handle.
  • The MAS will include yuan-denominated financial investments in its official foreign reserves from June, it said in a statement yesterday.

 

AUDUSD:

  • Spot 0.7517
  • AUDUSD climbed to its highest in seven weeks, rising 0.5% to 0.7528 earlier today and back to where it was before last month’s rate cut by the RBA.
  • In a note to clients, Westpac Banking Corp. expects AUD to continue strengthening should Remain wins in tonight’s UK referendum.

 

USDCAD:

  • Spot 1.2810
  • Retail sales in April rose 0.9% from a month earlier and 1.3% from a year before, beating estimates of 0.8% and 0.7% respectively. Prior figures were both revised higher as well.
  • USDCAD advanced 0.6% to test its 50-day moving average of 1.2856, but has since retreated back towards the 1.2800 handle.

 

USDCNH:

  • Spot 6.5868
  • The PBOC strengthened its yuan fixing the most in over two weeks. USDCNH fell 0.2% to 6.5783 earlier.
  • According to economists at UBS and JPMorgan, China’s fiscal deficit when taking off-budget spending into account will exceed 10% of GDP this year, more than triple the government’s stated ratio of 3%. The increase in fiscal spending is a result of the government stepping in as private businesses begin to tighten their belts.

 

USDNOK:

  • Spot 8.2454
  • USDNOK fell 0.6% to a session low of 8.2390 this morning. The currency pair continues to be supported by its 50-day moving average of 8.2310.
  • Prime Minister Solberg warned exporters in Norway against relying too heavily on the weakening krone that has supported their sales abroad in recent years, stressing that productivity and innovation are more important for growth moving forward.
  • After losing about 30% on a trade-weighted basis from 2013 to early 2016, the krone has shown recent signs of strengthening as it is about 3% stronger on a trade-weighted basis, since January.
© Jachin Capital Pte Ltd

UEN: 201419754M


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