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Financial Markets Review – 24th June 2016

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Moneyfarm

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Monday 20 June

  • ECB released their official CSPP holdings figures following the first full week of purchases to last Friday. Current holdings amount to €2.25bn of corporate purchases since buying first started on June 8th. Bloomberg is reporting that purchases last week amounted to €1.9bn which would imply a slightly better than expected run rate on roughly >€5bn monthly expectation for now.
  • Minneapolis Fed President Kashkari said that the effect of a potential ‘Brexit’ is likely to have only ‘moderate direct effects on the US economy in the near term’. He confirmed that all policy options would be on the table in response to a ‘leave’ outcome.

Tuesday 21 June

  • ECB President Draghi confirmed that the Bank is ‘ready for all contingencies following the UK’s EU referendum’. Draghi added that while it was ‘very difficult’ to predict how the vote could impact markets, he confirmed that ‘we’ve done all the preparations that are necessary now’ and that the Bank stands ready to act if needed.
  • German ZEW survey for June exceeded expectations with the headline current situations print rising 1.4pts to 54.5. Even more impressive was the 12.8pt rise in the expectations component to 19.2 (vs. 4.8 expected) which is the highest level since August last year. Given Thursday’s vote, the data looked surprisingly upbeat.

Wednesday 22 June

  • The ECB announced that it is reinstating the waiver on Greek debt and allowing them to be used as collateral to access ECB loans. Consumer confidence reading for the Euro area in June weakened to -7.3 from -7.0 in May. Expectations had been for no change.
  • In the US the existing home sales rose +1.8% MoM in May as had been expected. The FHFA house price index revealed a lower than expected +0.2% MoM rise in April. 

Thursday 23 June

  • Germany Manufacturing PMI for June came in above expectations at 54.4, versus forecast of 52, whereas the same data from France was below expectations.
  • US New Home Sales for May was lower than forecast of 560k and came in a 551k.

Friday 24 June

  • The UK voted in favour of leaving the European Union, Prime Minister David Cameron will step down and government leadership re-shuffle expected.
  • Bank of England announced that they will injected additional liquidities to calm the market.
Index Actual price Week to date Month to date Year to date
S&P 500 2157.1 -0.7 -1.9 0.6
Eurostoxx 600 324.1 -0.5 -6.7 -11.4
Nikkei 14952.0 -4.2 -13.2 -21.4
MSCI Emerging Markets 835.4 3.6 3.5 5.2
FTSE 100 6197 2.92 -0.54 -0.73
Treasury yield 10 years 1.58 -0.03 -0.27 -0.69
Bund yield 10 years -0.05 -0.07 -0.19 -0.68
Gilt yield 10 years 1.10 -0.05 -0.33 -0.86
USD vs Sterling 1.365 -4.95 -5.77 -7.38
Sterling vs Euro 0.815 -3.66 -5.71 -9.59
USD vs Emerging Markets FX 68.640 1.78 2.86 4.57
Commodity Index 189.7 -1.4 1.9 7.7
Gold 1316.9 1.4 8.4 24.1
Brent Oil 48.6 -1.1 -2.1 30.4

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The articles featured on the Moneyfarm portal are the result of collaboration between the Moneyfarm Research Centre, the advisory team, and the management team. They reflect the expertise and wealth of knowledge within the company. However, they should be regarded as informational material and not necessarily linked to the investment decisions made.