*due to technical issues there is no morning update video today*
Good morning,
Pound hits 3 week low vs USD
Everybody in currency is talking about the pound at the moment following another day of volatility and polls. 3 polls released through Sunday night had the Leave camp pulling out more of a lead while 2 released later in the session showed the Remain camp still enjoying a slim advantage.
Leave have the momentum, it is clear to see and the switch from a conversation on economics to a conversation on immigration has underpinned this. Once someone makes immigration their top voting priority there is little than can shift that, regardless of how much of a monetary hit may be forthcoming. If you believe that your own situation has been so negatively affected by immigration so as to already take money out of your pocket then it is a simple decision to reverse that by voting for less immigration.
Only one campaign is promising that and Cameron’s pledge of getting immigration into the UK down to 100,000 is looking more foolish by the day.
Polling still a complete guessing game
The most recent polls have been made all the more interesting by 2 dynamics. Firstly, the amount of people answering ‘don’t know’ has started to fall with those now making a decision seemingly breaking in favour of the Leave campaign. The traditional idea is that, much like last year’s General Election, there are hordes of silent voters willing to roll out on polling day in favour of the status quo.
Instead, are these silent Tories who swept Cameron to power also Brexiteers who returned Cameron to power in the knowledge that a referendum would come and they could cast the vote they really wanted?
These polls also took place as those voters who had applied for a postal vote were filling in their ballots so maybe we are getting some hints already of how the die may have been cast?
Voter registration is soaring; seen as a positive for the Remain camp with 226,000 people alone registering yesterday; 65% of whom are under 35.
Strange Currencies
Sterling slid to a 3 week low against the dollar but has recovered after some strange trade in Asia. The pound was largely quiet through Asian trade before spiking by more than a cent in a minute against the dollar. Liquidity is thin on the ground in Asian trade and this could easily be an example of a trader hitting the wrong button and the market getting itself in a bit of a panic.
It certainly shows that markets are skittish and low liquidity that will get lower by June 23rd can see some volatile swings.
We remain in Team September
Janet Yellen spoke yesterday and underpinned the thoughts that a rate rise in the States this year is still on track. Friday’s payrolls announcement of a meagre 38,000 jobs added to the US economy in May was so bad that the conversation now shifts from ‘when should the Fed hike?’ to ‘is the cycle turning?’
History is on the side of the optimists in so much that previous releases that have missed consensus by that much have been revised higher the next month by around 60,000 jobs. That would still give us a number below 100,000 and there are arguments there to say that we are reaching full employment but without productivity gains, wage gains are not going to be forthcoming anytime soon.
Today’s data calendar is quiet and we do not expect any new polls through today’s session
Have a great day.