The ‘Brexit’ rebound ran out of puff on Wall Street this morning as key indices saw early gains halved and more. The Aussie market will start with a small gain of around 7 points according to the ASX futures market. but that too was down sharply in late trading.
The rebound momentum started in Australia and the rest of Asia yesterday with the ASX up 94 points and markets in Japan and Hong kong seeing solid gains.
That continued into Europe and the Footsie in London leapt more than 3% (It’s best day since February) as opinion polls had better news for the ‘Remain’ camp and investors started thinking the push towards the ‘Leave’ had run out of puff.
The Aussie dollar ended around 74.60 as the US dollar had an easing day. US interest rates rose with the yield on the 10 year bond up 5.3% to 1.68%. Gold fell, but oil rose.
And while markets will start trading today, and the next three days looking for good news from people like Fed chair, Janet Yellen, all eyes will be on the daily flood of UK opinion polls between now and the vote Thursday night, our time.
In fact US investors especially will have something else to worry about over the next two days with Federal Reserve chair Janet Yellen’s half yearly testimony to Congress.
Her comments on the timing of interest rate rises and the health of the US economy follow the Fed’s meeting last week, where the central bank put a rate rise on hold for the time being.
Her comments on the Brexit vote – another key concern for the Fed last week, will also feed into market sentiment as the vote approaches. While Wall Street stocks closed up at the close this morning, our time, they were well off their session highs.
US investors took heart from the lead of European markets as polls showed support swinging back toward Britain remaining a member of the European Union ahead of the referendum. The Dow which had climbed as much as 271 points earlier in the session, closed up 129.71 points, or 0.7%, at 17,804.87. The S&P 500 index added 12.03 points, or 0.6%, to close at 2,083.25.
Earlier, the index had been up as many as 30 points. And the Nasdaq advanced 36.88 points, or 0.8%, to close at 4,837.21, after being up as much as 82 points. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.3%, and South Korea’s Kospi jumped1.5%. Japan’s Nikkei jumped 2.4%, helped by a fall in the yen.
After rising early, the ASX 200 index had its best day for nearly two months, posting a 94 point, 1.8% gain to 5256, while the All Ordinaries finished 1.7% or 87 points higher to 5335.6.
