Pound Rallies on Referendum Day

Morning Report: 09.00 London

• It’s a momentous day for the UK, but it’s mainly yesterday’s activities that are driving markets this morning.

• Yesterday’s Fed meeting sparked yet another rally in the dollar index, depressing dollar pairs and sending the yen pairs soaring. The S&P 500 is higher but is still choppy.                                                                                            

                               
                                                                                                                                                                   
                               

• The yen pairs are the big movers, helped by continued strength in the the US dollar. The GBP/JPY is the big mover, while the USD/JPY continues its drive higher.

                               

• The dollar pairs are rising slightly after taking a beating yesterday. The EUR/USD is notable for its under performance.

                               

• The pound pairs were the big movers yesterday, helped by better than expected earnings and unemployment data.

                               

Coming up today:

• Coming up today we have UK retail sales at 09.30, followed by CBI industrial order expectations at 11.00.

• The ECB’s first targeted LTRO data is released at 10.15.

• From 13.30 we switch to North America, with building permits and unemployment claims at 13.30.

• Fed chair Yellen speaks at 13.45, with US Philly Fed manufacturing at 15.00.

Trade Idea:

• With the betting odds continuing to favour a No vote in the Scottish referendum, there could be further upside for the out performing GBP/JPY.

A HIGHER trade predicting that the GBP/JPY will close above 178.00 could return 108% if successful.

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