Post EU vote turmoil contained in part, but stocks still deep in the red. GBP is well off its lows, but the EU leave vote impact yet to be felt. JPY and CHF strength contained for now.
The aftermath of the surprise UK referendum caused plenty of volatility across all asset classes, but given the hype over the potential fallout, we saw some containment once London got underway, with liquidity vastly improved in FX. Cable suffered a near 18 cent drop after briefly tipping the 1.5000 level, basing out around 1.3225-30 before recovering to close to 1.4000 at one stage. Having held off this level since, it has been a USD/risk move since, but further implications of the leave vote likely to weight. Global indices curbing their losses on the day – still very much in the red – and JPY and CHF strength has been similarly contained, but admittedly with the help of the respective central banks; the SNB confirming action in the market. EUR/CHF fell into the low 1.0600s but has been trading either side of 1.0800 since. USD/JPY losses through 100.00 eventually find support just in front of 99.00, but the recovery has stopped short of 103.50 – the previous range base. Elsewhere, AUD, NZD and CAD have been largely moving in tandem, and although well off better levels, have been equally well supported in the wake of the post EU vote sell off. USD/CAD topped out at 1.3100 while AUD/USD found bids in front of .7300. NZD/USD dipped under .7000 but has also bounced back by almost 2 cents. Into the weekend we watch to see how Wall Street fares, but into next week US and UK GDP reads will provide the focus, but we also have manufacturing PMIs out of China with Fed chair Yellen and Draghi also scheduled to speak.