Sharp shift in public opinion on Brexit

According to a new Sky Data poll, British public opinion on Brexit has undergone a marked shift with 78% - or approximately 4 out of 5 respondents - stating their belief that the government is doing a bad job. Theresa May’s approval rating has also taken a hit, with results showing only 24% are satisfied with her performance as PM, a 17 point drop. This may be seen as a case of buyer’s remorse setting in two thirds of the public, which includes a majority of leave voters, now thinking that the outcome of Brexit negotiations will be bad for Britain. Unfortunately for remainers, while the results are no doubt a damaging blow for the government, it still remains highly unlikely that we’ll see another referendum with the poll suggesting the public are seemingly willing to settle for what they deem will likely be a worse lot.  

Busy week of economic events ahead

The forthcoming sessions are pretty full as far as the economic calendar is concerned with 3 major central bank policy decisions in the next 3 days. The Bank of Japan (BoJ) are up first in the early hours of tomorrow morning, before the Federal Reserve (FOMC) on Wednesday evening and the Bank of England (BoE) Thursday lunchtime. Both the BoJ and FOMC are widely expected to make no material changes to their current policy stance, with any tweaks in the statements likely to provide the catalyst for market moves should they occur. According to implied probabilities a 25 basis point increase from the BoE is pretty much nailed on, with traders likely to focus on whether the hike is delivered in a dovish or hawkish fashion and this will likely determine the market reaction as far as the pound is concerned.    

Tech drop offers a  warning of potential summer turbulence

The summer months are often seen as doldrums as far as the markets are concerned with the perception dating back several centuries and characterised succinctly with the “sell-in-May” trading adage. However, there have been some large moves in recent years and there are growing signs that we could be set for another turbulent August as we saw in 2011 and 2015. The root causes of those plunges were the Eurozone debt crisis and fears of a Chinese slowdown, and while the latter of the two could in particular resurface in the not too distant future the early signs this time around, should another plunge occur, seem to be in US tech stocks. Last week’s stunning drop in Facebook caught many off guard and serves as a timely reminder that the latest leg higher in US markets has come on a narrowing breadth and increasingly ambitious price multiples. There remains much to occur before we even get anywhere near the panic seen in previous August’s but there are a growing set of circumstance arising which may spark a period of heightened volatility.   

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