Following the collapse of the global stock markets last Friday, caused by the UK referendum, investors do not believe in the instant recovery of the markets and are still apprehensive about the future of the UK.
On Monday, stock markets continue to decline, the Pound reached 30-year lows.
During the last two trading sessions –last Friday and this Monday, major US indices lost positions achieved a few weeks ago.
Plus to concerns about the state of the global economy and the ability of the US Fed to stimulate economic growth and inflation in the country, in
vestors begun to worry about the consequences of UK exit from the EU. At the end of trading session on Monday stock index Dow Jones Industrial Average fell by 1.5%, S&P50 fell by 1.8%, Nasdaq Composite – by 2.4%.
Investors bought government bonds and other safe-haven assets such as gold, the yen. The yield on 10-year U.S. Treasury bonds, which is in inverse ratio to their value fell to 1.461%, which roughly corresponds to the record lows in the US bonds in July 2012 at the level of 1404%.
USD also rose sharply on Monday. Index WSJ, which tracks the exchange rate of the USD against a basket of 16 other major currencies, rose by 1.1% to 87.50.
However, at the Asian session on Tuesday stock markets demonstrated minor recovery based on the opinion that the worst is over and also due to the belief that the US Fed is unlikely to raise interest rate this year. The price of futures is based on the decline of expectations of the interest rate hike by 17%. No one believes that the US Fed may raise the rate at the meeting in November. On Tuesday, the index WSJ fell by 0.4% to 96.167 against the recent strong growth after a referendum in the UK.
During the Asian trading session on Tuesday American stock indices also showed a moderate recovery after the sharp fall over the previous two sessions. Index Nasdaq Composite has grown by 1.0%, up to 4235.0.
Today’s news will include: a speech by the ECB President Mario Draghi (10:00 GMT+2) and important US macro-economic data (annual GDP in Q1, indices of personal consumption expenditures, retail sales, housing prices, consumer confidence index for June) from 14:30 to 16:00. 22:30 American Petroleum Institute (API) will publish report on changes in the US oil reserves for last week.