General optimism around global markets today suggests that U.S. stocks will follow suit this morning. During pre-market hours, U.S. stock futures were highly volatile and were seen oscillating between gains and losses. NASDAQ (INDEXNASDAQ:NDX) Futures was hovering near 4,417 while S&P 500 INDEX (INDEXCBOE:SPX) Futures fell 0.08% to 2,068.75.
Bank of England reiterates caution
U.S. markets experienced a volatile day yesterday, June 16 after reports emerged that consumer prices rose by 0.2% in May versus expectations of 0.3%. Global equities were resilient as worries over the Brexit referendum seemed to have subsided for a time. Bank of England governor Mark Carney had reiterated that Britain’s decision to leave the European Union will aggravate recessionary pressures and remains a major risk to world financial markets. These remarks came after both the Federal Reserve and the Bank of Japan had left policy rates unchanged in view of uncertainty over Britain’s status ahead of the Brexit vote.
Anxiety was contained later in the day after a British Member of Parliament was shot and killed yesterday, leading to suspension of parliamentary discussion over Brexit. During today’s trade, Asian indices finished higher amid speculations that the Japanese government will arrest a rally in the yen. Resultantly, the US Dollar (CURRENCY:USD) also pushed higher against the yen but remained subdued against the British pound and euro.
Oil brushes off Brexit fears
Recovery in the greenback led gold and the SPDR Gold Trust (ETF) (NYSEARCA:GLD) to fall, booking profits after gold touched a 23-month high. Analysts hold the view that changes in the outlook towards a Brexit referendum will keep volatility higher in the yellow metal. It would not be surprising if gold gets an immediate boost next week in case Britain decides to leave the EU.
Like equities, oil prices also booked gains during the day as traders moved over Brexit concerns. However, many analysts maintain that oil prices will be highly impacted by what happens in Britain next week.