Market Update – 21st June 2016 – Brexit Fears Ease, Equities Post Biggest Gains In Months

European equities had their best session in three months overnight as Brexit fears eased and polls showed positive momentum towards the ‘Stay’ campaign. The Euro Stoxx 50, CAC (French Indice) and DAX (German Indice) surged over 3%, while Greek shares rose the most up nearly 8%. U.S equities also rallied but to a lesser extent with indices posting gains of between half and one percent.

Overall it was a very strong ‘short squeeze’ overnight with bulls well and truly getting the better of bears adamant that all the doom and gloom is warranted. Should the U.K decide to stay part of the EU a fair bit of uncertainty will unwind from markets and hence we could be in for some further positive sessions for not only European equities but also global markets in general – at the end of the day markets hate uncertainty and all Brexit does is add fuel to that uncertainty.

Local RBA monetary policy minutes are released this morning, followed by timely speeches/comments from ECB President Draghi and Fed Chair Janet Yellen later this evening.

DATA RELEASES TODAY:

AUD – Monetary Policy Minutes at 11.30am

EUR – German ZEW Economic Sentiment at 7.00pm

AUD EXCHANGE RATES:

AUD/USD – 0.7459

AUD/GBP – 0.5084

AUD/EUR – 0.6589

AUD/NZD – 1.0488

AUD/JPY – 77.478

***Above rates are indiciative wholesale rates and intended as a quide only***

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Patrick Downes

Senior Corporate FX Dealer

 Compass Markets

Contact Patrick for a quote on 0431 278 632

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