The global financial markets are rocked by the surprised result of the EU referendum in UK. At the time of writing, the "Leave" camp has already secured the 16.8m vote needed to win the referendum. GBP/USD took out 2009 low at 1.3503 to the lowest level since 1985. And the sharp decline already exceeded what it suffered in the Black Wednesday in 1992. Yen and to a lesser extend Dollar, are the sole beneficiaries of the development. In the stock markets, Nikkei responds by falling nearly -1200 pts at the time of writing while HK HSI loses nearly -1000 pts. Gold jumps more than 5% and reaches as high as 1362.6 so far. WTI crude oil is under some selling pressure and breaches 47 handle.
Markets' focus will now turn immediately to UK and EU officials' response to the result. There are talks that UK prime minister David Cameron could choose to step down after the defeat. EU leaders would meet next week on June 28 and 29 and Brexit will definitely be an important topic. Meanwhile, the result could trigger some responses from global central banks. In particular, there are already rumors that BoJ would hope an emergency meeting and might announced new measures to curb the current Yen strength. Meanwhile in the medium term, UK will be given 2 years time to negotiate its exit out of EU.
Dallas Fed president Robert Kaplan said that "in light of what's happened in the last few months ... I'm in a position where I want to show more patience and see more information" regarding rate hike. In particular, he'll be watching data for "a trend established that we're making improvement". And, "it would be helpful to remove accommodation (gradually), but we can't force it."
On the data front, Japan corporate service price rose 0.2% yoy in May. German Ifo business climate is the main feature in European session and are expected to show slight deterioration in sentiments. UK BBA mortgage approvals are expected to show 37.9k in May. US will release durable good orders and are expected to show -0.8% fall in headline orders and 0.3% growth in ex-auto orders.