Market volatility following last week’s Brexit has settled down somewhat and global markets seem to be holding steady. The overall picture, however, is still very much uncertain and this could simply be the calm before the storm, a short term interim move offering a chance for traders to sell out before the frenzy is renewed.
Wall Street was up 1.7% Wednesday and Asian markets were mixed overnight with current European trading following the trend.
Worse Month Since January
According to analysts, global stocks were set for their worst monthly performance since January and the MSCI All-Country World index is set to end the month down 2.5 percent, its worst month since a troubled start to the year as worries that a weaker Chinese yuan could spark deflation continue.
The two-day selloff in the aftermath of last week's vote wiped more than $3 trillion off the value of global stocks.
In currencies, sterling was up 0.2 percent, picking up some following a 31-year trough of $1.3122 touched on Monday. It is still down more than 6 percent in the quarter.
The four major Forex pairs today seem to reflect a shift back towards safe haven plays with the yen performing strongly and the rest of the pairs underperforming the US dollar.
Another safe haven, gold, is trading a little less positively in early moves and is a tad down today whilst silver is holding on to yesterday’s gains. Oil has mostly recovered what it lost after the Brexit shock and is trading around a percent lower as supply disruptions in Norway and Nigeria look to be resolving. For the quarter, Brent has risen 26 percent on hopes that declining production in some countries would ease a global glut.
Bank of England Governor Mark Carney is expected to speak at 16:00 BST and markets will be looking for more hints on monetary policy in the wake of Brexit.