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Nigerian stalemate continues

Published Wednesday, June 22nd, 2016

Monday’s blockbuster performance across global stock markets gave way to a more guarded session yesterday as Thursday’s crucial vote drew closer. Gains were more muted and volumes relatively subdued with investors having already positioned themselves ahead of the EU referendum. The Remain campaign continues to hold the advantage and the underlying optimism briefly sent the pound to a six-month high against the dollar as markets brushed off disappointing UK public borrowing figures. Though some may be forgiven for thinking that the outcome is a foregone conclusion, the inconsistency between the betting money and the polls mean that conditions are ripe for a fresh bout of volatility.

Away from the Brexit debate was a speech by Janet Yellen in which she mirrored her cautionary stance seen at last week’s FOMC press conference. She failed to offer any new clues on the trajectory of US interest rates and simply reiterated that there remain pockets of uncertainty in the US economic recovery. With last month’s weak jobs report still fresh in the mind, she hinted that the Fed will not consider raising rates until signs point to improving US labour market conditions.

The modest advance on share indices was not tracked in the oil markets which spent most of the session in the red but recovered well to end the day with only marginal falls. Brent slipped below $50/bbl and traded down to $49.46/bbl (-1.19) before settling 3cts lower at $50.62/bbl. WTI fell to a low of $48.85/bbl (-1.11) but trimmed its losses to 11cts with a close of $49.85/bbl.

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Posted by Stephen Brennock

Stephen Brennock joined PVM in 2013 after having worked as a project manager for a business development firm. He graduated with a degree in Business Management in 2007.