U.S. Futures Add Early Gains As Eyes Turn To UK Referendum

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U.S. stock markets moved higher during the premarket session, reflecting the general yet guarded optimism that the UK is less likely to exit the European Union. In early hours, S&P 500 INDEX (INDEXCBOE:SPX) Futures edged higher by 0.08% to 2,082.25 and NASDAQ (INDEXNASDAQ:NDX) Futures climbed 0.13% to 4,406.12.

Referendum driving markets

The U.K. referendum remained a dominant factor to influence market moves across the globe. Asian markets finished mixed, while most traders in Europe were positive about Britain’s continuing in the EU. Recent opinion results show a close call between the remain and leave campaigns, which is why analysts caution investors to remain alert before the outcome.

Meanwhile, the British pound continues to trade near six-month highs but stares at a steep cliff if Britain exits the EU. According to several analysts, the pound could test a level below $1.30 on Brexit. The day marks the third session in a row when the pound climbed as investors increasingly factor in Bremain.

Market discounts July rate hike

U.S. Dollar (CURRENCY:USD) erased early day gains as the market moved past Federal Reserve Chair Janet Yellen’s comments. Yellen had reiterated that rate hikes will take place in a gradual manner, however, she steered away from specifying a timeframe. After her dovish comments, markets have discounted any July rate hike from the equation. However, the dollar slump failed to move SPDR Gold Trust (ETF) (NYSEARCA:GLD) as UK referendum weighed over other factors in play. Analysts warn that any unexpected Brexit outcome could lead to bigger profits in safe-haven assets.

Oil traders brushed aside referendum concerns to cheer the American Petroleum Institute’s report, released yesterday. A steep fall in U.S. crude reserves sent West Texas Intermediate Crude oil above $50. The U.S. Energy Information Administration’s weekly report on oil will be a key focus for traders later today as a decline of 1.7 million barrels is eyed.

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