Tuesday June 21st

21-06-2016

Futures hold higher as Brexit fears mostly ease

U.S. stock-index futures were indicating another positive start for major Wall Street indexes Tuesday as Brexit fears faded amid fresh polls that showed positive moves for the remain campaign. Investors seem to have breathed a small sigh of relief as the most recent polls ahead of the June 23 referendum showed the remain camp moving ahead. The latest poll released by YouGov/The Times shows 42 percent likely to vote remain, 44 percent to leave, but 9 percent undecided. Meanwhile the ORB poll for The Telegraph newspaper showed a remain camp opening up a 7 point net lead at 53 percent versus 46 percent likely to vote to leave. However, a Survation poll conducted for spread-betting firm IG showed Tuesday the leave camp gaining momentum again, at 44 percent versus the 42 percent published in a poll for the Mail over the weekend. Support for the remain camp held steady at 45 percent. The new Survation poll was conducted by telephone Monday, IG said in a Reuters report. U.S. stock index futures traded off session highs. The U.S. dollar index traded mildly higher, with the euro near $1.129 and the yen weaker against the dollar at 104.4 yen. Sterling came off highs to trade near $1.468. Treasury yields were a touch lower, with the 2-year yield around 0.75 percent and the 10-year yield around 1.67 percent. The gains in U.S. stock index futures followed mostly positive trading overseas, with the European STOXX 600 index trading about half a percent higher in morning trade ET. Asian stocks closed mostly higher, with the Nikkei 225 up more than 1 percent. The Shanghai composite lagged with a decline of about a third of a percent. Major company earnings today include FedEx, expected at approximately 4:15 p.m. ET and Adobe Systems due out around 4:00 p.m. ET. Investors will also keep an eye on comments from Federal Reserve Chair Janet Yellen who is set to testify in front of the U.S. Senate Committee on Banking, Housing and Urban Affairs from 10:00 a.m. ET. Yellen will later appear at the Treasury Department's Financial Stability Oversight Council alongside Treasury Secretary Jack Lew at 4:30 p.m. ET to discuss the council's 2016 annual report. Oil prices fell on Tuesday after a strong two-day rally abated amid volatility fed in part by a vote later this week in Britain that will determine whether the country will leave the European Union. Reports from Nigerian media that the government had signed a 30-day ceasefire with militants whose attacks have curtailed the country's crude oil exports also added a bearish signal to a market that firmed on the back of supply disruptions. Brent crude August futures were trading at $49.77 by 8 a.m. ET (1200 GMT), down 88 cents a barrel, or 1.7 percent. The contract has risen by more than 6 percent since Thursday's settlement, after dropping 10 percent in six previous sessions. U.S. crude's expiring July front-month contract was down 80 cents, or 1.6 percent, at $48.57 a barrel. The more actively traded August contract, the new front-month from Wednesday, was down 61 cents at $49.35. That contract settled up nearly 3 percent at $49.96 on Monday. Gold fell for a second session in a row on Tuesday as fears that Britain could vote to leave the European Union in Thursday's referendum receded. Two opinion polls on Monday showed the "Remain" camp had recovered some ground in the referendum debate though a third poll found those wanting to leave were ahead by a whisker. Spot gold fell 1.4 percent to $1,271.02 an ounce, while U.S. gold fell 1.4 percent to $1,274.20.