Jitters among FX traders, dip in oil futures cap winning streak in Footsie

Stocks finished the session and the month slightly lower, as the results of two referendum polls combined with weakness in commodity and oil stocks on Tuesday to put paid to the Footsie´s three month winning streak, with the top flight index finishing May 0.2% below where it had started.

Three-month LME copper futures were left nursing losses of approximately 7% for the month, their weakest showing since November, with the July 2016 futures contract on COMEX to be seen down by 0.95% to $2.0940 per pound as of 20:08 BST.

Not coincidentally perhaps, overnight futures on China´s CSI 300 index fell limit down by up to 10% at one point in the session, rekindling cautious talk in markets - particularly coming as it did on the heels of a considerably weaker fix in the Yuan´s official exchange rate in the previous session.

Linked to the above, in a research note dated 30 May analysts at Morgan Stanley said data on Chinese oil product demand reinforced concerns on the part of its economists that the Asian giant´s economy might be slowing earlier than expected.

Regarding the risks of Brexit, the results of two Guardian/ICM polls published on Tuesday suggested there were more Britons wanting to leave the European Union than those wanting to remain in the bloc ahead of the 23 June referendum, weighing on the real estate space.

An online poll showed 52% in support of Brexit compared to 48% in the Remain camp, while a telephone poll revealed 45% in the Leave camp compared to 42%on the side of Remain and 13% who remain undecided.

“It is worth noting that ICM surveys typically do favour a Brexit, with phone polls often coming out more heavily on the ‘leave’ side too,” said IG analyst Josh Mahony.

Be that as it may, both stocks and the pound reacted swiftly to news of the polls, with the latter losing 1.07% in value versus the US dollar to trade at 1.4482.

In parallel, a rise in the US dollar spot index of 0.28% to 95.79 weighed on crude oil futures and shares in the oil patch, with some market commentary also referencing the retreat in oil to the selling pressure in shares of Inmarsat.

Top performing sectors so far today
Software & Computer Services 1,705.52 +1.07%
Electronic & Electrical Equipment 4,360.95 +0.98%
Industrial Transportation 3,005.09 +0.84%
Insurance (non-life) 2,566.65 +0.77%
Automobiles & Parts 6,427.34 +0.55%

Bottom performing sectors so far today
Industrial Metals & Mining 1,093.21 -4.72%
Fixed Line Telecommunications 5,036.89 -1.93%
Real Estate Investment Trusts 3,140.12 -1.59%
Mining 8,783.41 -1.50%
Oil & Gas Producers 6,087.39 -1.19%