Brexit fallout to dominate week ahead
WEEKLY MARKET COMMENTARY |
In the wake of the historic vote in the United Kingdom to exit the European Union (EU), investor focus this week will be on the rhetoric that emerges from the meeting of global central bankers at a European Central Bank (ECB) forum, and the emergency meeting of EU leaders. Given the general uncertainty over how the exit process will proceed, markets are likely to remain quite volatile across asset classes. We anticipate further gains for the dollar against the sterling, euro and peso, while further depreciation against the yen. The U.S. 10-year Treasury yield may also decline further as investors seek a safe haven.
Back in the U.S. there is an impressive array of first-tier economic data that will be published, including an update on the U.S. trade balance, manufacturing, housing, the labor market and household spending. The Federal Reserve (Fed) will send three speakers out this week to shape market expectations, featuring Fed Chair Janet Yellen’s speech at an ECB forum on Wednesday.