Morning Briefing 8211 June 8th 2016

0855 BST

• A much less fitful overnight session with sterling holding above $1.45 dollars, having risen as much as 200 pts above Monday lows at the time of writing. Calmer FX conditions overall, largely due to lack of new major polls which would probably show UK Referendum campaigns Remain and Leave neck and neck at best. Ironically though, that also emphasises sterling’s vulnerability to fresh Brexit blasts, especially with current values looking like resistance now
• Elsewhere commodity currencies continued a recent advance led by the Aussie dollar after what market saw as RBA’s hawkish non-hike earlier this week. Yen might be strengthening again after a neutral and unchanged GDP outcome. Japan’s currency was last at 107.8 against the dollar, possibly eyeing 106, as the greenback limps on. The wounded dollar also allowed euro to creep back to the week’s highs too, around $1.1371, though the single-currency was looking toppy in the daily chart
• China brought the main overnight data with worse than expected exports even though imports beat expectations, giving some hope for improvement on the demand side.
• UK Manufacturing and Industrial Production indices release (0930 BST) will be the most important remaining calendar entries today, though since the data is from April, its impact will be somewhat reduced. We expect Britain’s factories to offer a picture which remains weak but is improving from the month before
• Stocks are off to a slow start, with Sainsbury’s topping the FTSE 100 after a well received sales update. DAX is down 0.5%, S&P futures flat-to-positive, Nikkei closed 1% higher, still bouncing off 4-week lows from Monday

Please look out for our updates on the above market developments and others throughout the day.