Asian stocks recover mildly today on talk that Brexit risks abate. Murder of pro-EU British MP Jo Cox brought the campaigns of both sides to a pause yesterday. The IMF has also postponed the release of its assessment of economic outlook after Britain leaving the EU. BoE Governor Mark Carney, scheduled to attend an event at Mansion House today, will scrap his planned speech about financial technology industry but deliver his comments on the assassination instead. British pound continued to trade with high volatility, torn between another survey showing lead of the "leave" camp and the speculated impacts of the killing on the referendum outcome. And the Sterling could be under selling pressure again as the June 23 EU referendum approaches.
Brexit proves to be the hottest topic in Central bank meetings. Both SNB and BoE policymakers also discussed about the issue. SNB left its deposit rate unchanged at -0.75%, and the target range for 3-month Libor target range stable at between -0.25% and -1.25%. Meanwhile, it kept the GDP growth forecasts unchanged while lifted the inflation outlook. President Thomas Jordan warned of the negative effects of recent Brexit uncertainty, indicating that the issue "has already caused volatility on the financial markets to rise… Uncertainty emanating from political events could escalate, hampering economic development". Jordan warned that Swiss franc has remained "significantly overvalued". Indeed, safe haven characteristic of the franc is especially appealing over the past weeks as uncertainty increases over Brexit referendum. The central bank is expected to continue intervention in the currency market so as to prevent franc from appreciating excessively.
BoE also left the policy rate unchanged at 0.5%. It also maintained the size of the Asset Purchase program at 375B pound. BOE indicated that the outcome of the referendum next week would be the biggest imminent risks facing financial markets in UK, as well as in the world. As noted in the minutes, policymakers are seeing "growing evidence that uncertainty about the referendum is leading to delays to major economic decisions that are costly to reverse". These include decisions related to "commercial and residential real estate transactions, car purchases, and business investment". Moreover, they viewed that "economic data releases more difficult to interpret". On exchange rate, the pound is expected to fall "sharply" if UK decides to leave EU.
Yen's strength continues today and is set to close as the strongest major currency this week. The Japanese currency was shot up yesterday but BoJ's inaction despite speculations of additional easing by the central bank. Japan finance minister Taro Aso warned that "stability in currencies is extremely important. We'll closely coordinate with other countries on this issue." And he vowed to "act more firmly than before if necessary" against the one-sided rapid movements in Yen.
Elsewhere, New Zealand business NZ manufacturing index rose top 57.1 in May. Eurozone current account is the only feature in European session. Canada will release CPI later today.