In the UK, Brexit polls continue to be relatively volatile
|Market Movers
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In the US, we don’t have any major economic releases.
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In the euro area, the GDP components for Q1 16 are due to be released today. Overall, GDP growth was solid at 0.5% q/q and we expect the components to reveal strong investment growth and still solid private consumption. We have already seen investment picking up speed in Germany while consumption remained solid and we expect similar numbers for the euro area. Tuesday will give us data on German industrial production. We expect positive numbers on industrial production for April led by the strong factory orders in March.
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In the UK, Prime Minister David Cameron and UKIP leader Nigel Farage are due to answer questions from the audience on an ITV EU referendum programme today.
Selected Market News
Yesterday, Fed chair Janet Yellen came out as more dovish than in her previous speeches, as she did not repeat that a hike ‘in the coming months’ could be appropriate, which supports our view (and market expectations) that a summer hike is off the table. Moreover, she highlighted that there are significant domestic and foreign economic uncertainties that warrant caution. According to current market pricing, the probability of a hike in July is below 30% and in September it is around 50% (before the jobs report the figures were 70% and 85%, respectively). The markets generally welcomed the dovish tone in Yellen’s speech. Last night, the US and most Latam stock markets finished higher and this morning Asian stock markets are also seeing solid increases.
In the UK, Brexit polls continue to be relatively volatile. After a series of polls from different companies suggesting some movement towards the ‘leave’ campaign (including a four-point leave lead in our previous poll, conducted last week) our latest poll for The Times (conducted on Sunday and Monday) shows the ‘remain’ camp back ahead by a single point. The volatility in the polls results may continue in the last two and half weeks, as in previous referendums public opinion has often changed a lot in the final weeks.
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