Does the Staying field pull out a victory in the referendum Brexit? After a bitter and hard-fought campaign, millions of Britons are voting on whether the country remains in the EU or block outputs. Most polls show a race head to neck between fields remain and leave, so undecided voters are likely to swing the vote and determine the final result. However, there is a clear discrepancy between polls and the mood of the market, as market sentiment continues to lean towards a victory for the camp remain. This feeling has boosted the pound, which briefly broke above 1.49 on Thursday and is trading at its highest level in 2016. The Remain field has warned that a vote to leave the EU could damage the economy UK, while the "Leave" vote has tapped into voter dissatisfaction with Brussels, particularly in relation to immigration and over-regulation by the EU. The economic stakes are huge, as the UK economy 2.9 billion pounds, is the largest in the world fifth and number two in Europe, after Germany. A vote to leave the comfort zone of the EU would be a journey into the unknown, with unpredictable economic and political consequences for the UK and the European Union. If the field Stay reign victorious, gold prices could fall as the market's appetite for risk will increase, which could be detrimental to gold as a safe haven.
Federal Reserve President Janet Yellen sounded cautious in his testimony on the US economy when he appeared before Congress this week. As expected, Yellen did not provide any clues about future rate hikes. She acknowledged that the US economy could face adversity, saying that "[c] onsiderable uncertainty about the economic outlook remains". Yellen said she is "hopeful that we will see a rebound in growth", but skeptics might respond that the markets want to see the Fed action and not just wait. The Fed was clearly out of sync with the markets, as highlighted by the statements by the Fed in December that could raise rates four times in 2016. Meanwhile, we are here in June, and there are clear indications that the Fed will raise rates throughout the year. In his testimony, Yellen said he does not expect the US economy to enter a recession, but if there was such a scenario, the US not follow Europe and Japan and adopt negative interest rates. On a more positive note, Yellen said weak oil prices, low interest rates and stronger wage growth should support consumer spending.
/ USD XAU Basics
Thursday (June 23)
8:30 jobless claims US. 271K estimate. 259K Real
US Flash Manufacturing PMI 9:45. 50.5 estimate. 51.4 reais
10:00 US Sales new home. 561K estimate. 551K Real
10:00 US Leading Index CB. 0.2% estimate. Real -0.2%
10:30 US Natural Gas Storage. 59B estimate. Real 62B
Upcoming key events
Friday (June 24)
8:30 US Core Durable Goods Orders. Estimate 0.1%
* Key Announcements are highlighted in bold
* All times are EDT release
XAU / USD for Thursday June 23, 2016
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