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Markets are relatively steady today as traders and investors await Fed chair Janet Yellen's testimony before Senate Banking Committee. Markets are also having another eye on news regarding the Brexit referendum on June 23. A YouGov poll for the Times newspaper showed 44% support "leave" and 42% support "remain. Another poll by ORB for the Daily Telegraph showed 53% support "remain" and 46% support "leave". Overall, the strong rally in pound and stocks this week suggests that the markets believe that UK voters will eventually choose to stay with EU.German ZEW economic sentiment jumped sharply to 19.2 in June versus prior 6.4 and expectation 5.1. Current situation gauge rose to 54.5 versus expectation of 53.0. Eurozone ZEW also rose to 20.2 versus expectation of 15.3. ZEW president Achim Wambach noted that "the improvement of economic sentiment indicates that the financial market experts have confidence in the resilience of the German economy." But, "general economic conditions remain challenging. Apart from the weak global economic dynamics, it is mainly the EU referendum in Great Britain which causes uncertainty." Also released from Europe, Swiss trade surplus widened to CHF 3.79b in May. UK public sector net borrowing rose to GBP 9.1b. CBI trends total orders rose to -2 in June.The RBA minutes for the June meeting unveiled that policymakers were content over Australia's growth and employment situation, although they remained cautious over the persistently low inflation. While acknowledging the recent increase in house prices, particularly in Sydney and Melbourne, the central bank did not view it as a barrier to further monetary easing. It also reiterated the comments that appreciation of Australian dollar could 'complicate the adjustment of the economy to the lower terms of trade'. Meanwhile, the RBA admitted possible volatility risks driven by Brexit referendum. The RBA was neutral in the monetary policy outlook but left the door open for a rate cut in August. More in RBA More Upbeat Over Growth And Employment, Weak Inflation Driver For Another Rate Cut.
