Here are the top five things you need to know in financial markets on Tuesday, June 21:
1. More Brexit polls show growing support for ‘Remain’ camp
Two opinion polls released late Monday indicated that support for the ‘Remain’ campaign had regained its lead over a vote to exit the 28-member bloc, just two days ahead of a highly-anticipated referendum.
An ORB poll for the Daily Telegraph newspaper found support for ‘Remain’ at 53%, up 5% on the previous one, with support for ‘Leave’ on 46%, down 3%.
Social research body NatCen also published a survey that found ‘Remain’ on 53% and ‘Leave’ on 47%.
However, an online poll by YouGov for The Times showed ‘Leave’ ahead on 44%, up 1%, with ‘Remain’ on 42%, down 2%. That survey was conducted over the weekend after the killing of Jo Cox, a Labour Party member and supporter of EU membership.
The pound climbed to 1.4783 against the U.S. dollar, the highest level since January 4. Sterling rallied around three cents on Monday, its biggest one-day gain in nearly eight years, on growing expectations that Britain would opt to remain in the European Union in a referendum later this week.
2. German constitutional court backs ECB’s bond-buying program
Germany’s Constitutional Court ruled Tuesday that an emergency bond-buying scheme created by the European Central Bank at the height of the euro zone’s debt crisis complies with German law, ending several years of legal disputes to the program.
The program, called Outright Monetary Transactions, or OMT, was created in September 2012, after ECB President Mario Draghi pledged to do “whatever it takes” to save the euro and prevent the euro zone from imploding at the height of its sovereign debt crisis.
The case was brought by 35,000 German politicians and academics who argued that the so-called OMT scheme violates European law.
Draghi is due to testify on monetary policy before the European Parliament’s Economic and Monetary Affairs Committee, in Brussels at 13:00GMT, or 9:00AM ET.
3. Fed Chair Yellen testifies
Federal Reserve Chair Janet Yellen is scheduled to testify on the economy before the Senate Banking Committee at 14:00GMT, or 10:00AM ET, Tuesday. She will appear in front of the House of Representatives’ Committee on Financial Services on Wednesday.
Her appearance comes less than a week after the U.S. central bank kept interest rates unchanged near record lows and lowered its projections for hikes in 2017 and 2018.
According to CME Group’s (NASDAQ:CME) FedWatch tool, market players are pricing in a 12% chance for a rate hike in July and 33% for September. Odds for a December rate increase stood at 54%.
4. Global stock markets pause after Monday’s rally
U.S. stock futures pointed to a small rise at the open on Tuesday, as investors waited for comments from Federal Reserve chief Janet Yellen and stayed on edge for Brexit-related developments.
Elsewhere, European stock markets were mixed in subdued trade, as markets paused following the previous session’s sharp gains and turned to an upcoming speech by European Central Bank President Mario Draghi and testimony from Federal Reserve Chair Janet Yellen.
Earlier, Asian markets closed mixed, with most major markets extending Monday’s global rally on easing Brexit concerns.
5. Oil falls for first time in 3 days
Oil prices pushed lower on Tuesday, falling for the first time in three days as market players looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles fell by 1.9 million barrels in the week ended June 17.
U.S. crude dipped 30 cents, or 0.6%, to $49.66, during morning hours in New York, while Brent was down 40 cents, or 0.8%, at $50.25 a barrel.