Weekly Market Review – June 20 − 24 2016
All Markets will be Impacted by the Brexit Referendum on June 23
The week concluded with the major currencies closing above the zero mark. The Japanese yen (+ 2.72%) gained the most against the USD. Additionally the British pound (+ 0.67%), Swiss franc (+ 0.47%), the Australian dollar (+ 0.32%) and the Euro (+ 0.24%) all grew against its US counterpart, with the just the New Zealand dollar (-0.09%) and Canadian dollar (-0.91%) regressing.
The dollar’s fall was primarily centered on last week’s FOMC meeting. The Federal Reserve decided to leave the rates the way they were and indicated that there will probably be just one rate hike for the remainder of the year as opposed to two. Aside from the risks pertaining to the US economy the rising probability of a Brexit was listed as one of the primary reasons for not raising the rates However, it was noted that should better US economic data appear, the rates will ultimately rise.
This week, the main event that will certainly impact this currency pair and the GBP in general will be the highly contentious Brexit referendum. Other events will include the Bank of Japan and the Reserve Bank of Australia Meeting Minutes roundups, German IFO Institute data, and the US Durable Goods Orders.
During the first half of last most major US stock indexes trended downwards. Investors treaded carefully on the eve of last week’s FOMC meeting. Additionally, the probability of Brexit provided further pressure. However, during the second half of the week the markets recovered almost half of the losses that they incurred earlier as the probability of Brexit decreased somewhat after a British MP was murdered. This week’s trading dynamics will be impacted by the results investors the UK Brexit referendum, scheduled for June 23. At the end of the trading week: Dow -1,06%, S & P -1,19%, NASDAQ -1,92%.
Last week major European stock indexes including the DAX yielded mixed results. Positive data on the European economy provided support, with retail sales, industrial production and CPI in the Eurozone increasing slightly. Additionally, in the second half of the week stock markets grew as the threat of a Brexit decreased somewhat.
Gold prices trended upward for most of last week. Investors have traditionally resorted to buying gold when the global economy is in a state of uncertainty. With the Brexit referendum scheduled for June 23, gold is becoming quite popular. On Thursday however, gold displayed the largest decline in a week as prospects of a Brexit softened somewhat after a British MP was killed. Without a doubt gold will be impacted throughout the week by the Brexit referendum scheduled for June 23.