Sterling has dropped against other major currencies after the latest EU referendum polls show the Leave campaign in the lead
Yellen warns on Brexit
Pound at three-week lows after latest polls
Sterling volatility at highest level since Lehman Brothers collapsed
EU referendum live: Cameron warns of economic timebomb
The agenda: Markets await Janet Yellen speech
6.25pm BST
Sterling is little changed after Fed chair Janet Yellen’s comments that US rates could gradually rise without specifying when that might happen, with investors more preoccupied with the Brexit polls showing the Leave camp in the ascendency.
The pound is currently down nearly a cent at $1.4451, while against the euro, the UK currency has weakened slightly again, down 0.49% at €1.2708.
6.16pm BST
Yellen: In a normal economy, a higher level of rates would be appropriate --BBG
Fed's Yellen talks data-dependence again. Says Fed constantly have to be reacting to new data
5.58pm BST
In her comments at Harvard at the end of May, Yellen talked about it being appropriate to raise US interest rates “in the coming months”.
Now she has repeated that “further gradual increases in the federal funds rate are likely to be appropriate” but the timescale appears to have gone.
5.53pm BST
Overall, #Yellen's speech suggests #jobs market won't sway Fed from hiking in July, but #oil, #USD, global #economy might. $DXY is flat
Janet don't-hold-me-to-anything Yellen send message that rates will rise but uncertainty means she can't say when https://t.co/Se67ov4esD
5.41pm BST
Yellen concludes:
To summarize, I have explained why I expect the U.S. economy will continue to improve and why I expect that further gradual increases in the federal funds rate will probably be appropriate to best promote the FOMC’s goals of maximum employment and price stability. I have also laid out the considerable and unavoidable uncertainties that apply to both this outlook for the economy and to the appropriate path of the federal funds rate. My colleagues and I will make our policy decisions based on what incoming information implies for the economic outlook and the risks to that outlook. What is certain is that monetary policy is not on a preset course, and that the Committee will respond to new data and reassess risks so as to best achieve our goals.
5.39pm BST
She pointed to a number of uncertainties for the global economy, including US domestic demand, the outlook for economies elsewhere and the prospect of Brexit:
One development that could shift investor sentiment is the upcoming referendum in the United Kingdom. A U.K. vote to exit the European Union could have significant economic repercussions.
5.37pm BST
Yellen’s speech is available here, with a live link here.
5.37pm BST
On the poor US jobs figures on Friday, she said:
Although this recent labor market report was, on balance, concerning, let me emphasize that one should never attach too much significance to any single monthly report. Other timely indicators from the labor market have been more positive. For example, the number of people filing new claims for unemployment insurance--which can be a good early indicator of changes in labor market conditions--remains quite low, and the public’s perceptions of the health of the labor market, as reported in various consumer surveys, remain positive. That said, the monthly labor market report is an important economic indicator, and so we will need to watch labor market developments carefully.
5.33pm BST
Federal Reserve chair Janet Yellen still expects further gradual increases in interest rates, although she said monetary policy would depend on the outlook for the economy:
If incoming data are consistent with labor market conditions strengthening and inflation making progress toward our 2 percent objective, as I expect, further gradual increases in the federal funds rate are likely to be appropriate and most conducive to meeting and maintaining those objectives. However, I will emphasize that monetary policy is not on a preset course and significant shifts in the outlook for the economy would necessitate corresponding shifts in the appropriate path of policy.
5.29pm BST
Janet Yellen is up shortly, speaking to the World Affairs Council of Philadelphia.
4.55pm BST
Despite fears about the consequences of the referendum on whether the UK should leave the EU, equities are holding their nerve, lifted by a strong performance from commodity companies. The FTSE 100, filled as it is with mining businesses, has outperformed other markets as the recent dollar weakness helped support metal prices. The UK index seemed unfazed by volatility in sterling as a number of new polls showed the Leave campaign in the ascendency. The final scores showed:
4.34pm BST
Commodity companies are supporting stock markets, not least because of the recent weakness in the dollar following Friday’s poor US jobs numbers.
Oil has also moved sharply higher, with Brent crude now up 1.9% at $50.58 a barrel after output in Nigeria was hit by militant attacks on oil infrastructure. Meanwhile there was a 1m barrel drop last week in inventories at Cushing, the delivery point for US crude, according to information group Genscape.
4.17pm BST
The pound is still lower after the raft of EU referendum polls showing the Leave camp in the ascendency, but the currency has come off its worst levels.
Sterling is currently down around a cent against the dollar at $1.4467 having hit $1.4381 earlier. The move is complicated by the US currency being affected by the uncertainty over when (or if) the Federal Reserve will raise interest rates this year. Investors are hoping for some clarification from Fed chair Janet Yellen shortly.
4.03pm BST
The chance of a June rate hike in the US is much lower now after the poor jobs numbers last week, according to St Louis Fed president James Bullard, but July is still a possibility.
In comments to the Wall Street Journal he also said Brexit was not a significant risk for the Fed.
*FED'S BULLARD: 'FAIR ASSESSMENT' CHANCE OF JUNE RATE RISE NOW MUCH LOWER
*BULLARD: BETTER FOR FED TO RAISE RATES ON BACK OF GOOD ECONOMIC NEWS
*BULLARD: HAS 'OPEN MIND,' WON'T 'PREJUDGE' JUNE FOMC OUTCOME
*BULLARD: 'IT'S POSSIBLE' FED MAY STILL RAISE RATES IN JULY
*BULLARD: OFFICIALS SHOULD STOP SAYING HOW MANY RATE RISES ARE LIKELY
*BULLARD: MAY JOBS DATA WAS CLEARLY A NEGATIVE SURPRISE
*BULLARD: BREXIT VOTE STILL NOT SIGNIFICANT ISSUE FOR US
3.52pm BST
Over in Greece, and another deadline apparently looms:
Euro Area Working Group Said To Give Greece 48 Hr Deadline To Comply With Bailout Actions -- BBG
3.45pm BST
So when might the Fed hike rates? Perhaps not even this year, some believe. Christopher Vecchio, currency analyst at DailyFX, said:
The May US labor market was the exact type of jobs report that could that could upend Federal Reserve policymakers’ hopes of raising rates in June. Remember in January when the Federal Open Market Committee was suggesting it was still going to raise rates four times this year? That was an odd notion then, and it outright laughable now.
Before Friday’s labor market report, the Fed funds futures contract was implying around a 22% chance of a rate hike in June. Today, it’s pricing just 4%.
3.42pm BST
Federal Reserve chair Janet Yellen is likely to hint at further rate rises later this year at her speech today, despite last week’s poor US jobs numbers, says Reuters. But an increase this month looks off the table:
Federal Reserve Chair Janet Yellen will likely keep the door open to an interest rate hike within the next few months when she speaks on Monday, while striking a balanced tone about recently disappointing jobs growth and mixed signals in the U.S. economy.
Yellen’s speech to the World Affairs Council of Philadelphia at 12:30 p.m. ET (1630 GMT) will address the economy and monetary policy, and is the last public comment by U.S. central bankers before their June 14-15 meeting.
2.56pm BST
US markets have joined in the general positive mood for equities, ahead of the speech later from Federal Reserve chair Janet Yellen.
The Dow Jones Industrial Average is currently up around 100 points or 0.5% while the S&P 500 and Nasdaq both opened in positive territory.
2.35pm BST
More signs of Leave gaining ground, from spread betting firm IG:
IG SAYS MORE MONEY NOW BEING TRADED ON AN "OUT" VOTE IN UK'S EU REFERENDUM VS "IN" VOTE #Brexit
2.31pm BST
It will be a long night for City traders on 23 June, the day of the EU referendum.
According to Bloomberg a number of banks, including RBS, JP Morgan, Lloyds Banking Group and Morgan Stanley plan to keep traders in place overnight to monitor market movements as the results unfold.
2.14pm BST
For hints at the timing of further US rate rises, all eyes are on a speech later from Federal Reserve chair Janet Yellen.
But ahead of that Atlanta Fed president Dennis Lockhart has urged patience following Friday’s disappointing US jobs numbers, telling Bloomberg the economy is on track for only moderate growth and Brexit is a risk for the economy.
Fed’s Lockhart: Jobs Number, Brexit Justify Patience
- On Track For Moderate US Growth
.@AtlantaFed President Lockhart: Jobs report, Brexit, justify patience. Listen now: https://t.co/LX1veMheFA @mckonomy
Lockhart: Uncertainty is more intense now than few years ago. Listen now: https://t.co/LX1veMheFA @mckonomy @AtlantaFed
Fed’s Lockhart says jobs number and Brexit justify patience. He said "2-3 hikes this year" three weeks ago.
1.46pm BST
The pound’s volatility in recent days shows that City traders have been rapidly revising their expectations on this month’s referendum.
Ulrich Leuchtmann at Commerzbank sums things up (via the FT)
“The market has become too comfortable with its ‘things will work out all right’ approach. [It] would be far less prepared for a Brexit outcome than for a ‘Bremain’. That is the reason why these polls receive far more attention and move the market much more than those polls that still see a lead for ‘Bremain’.”
12.51pm BST
The Telegraph have pulled together a few interesting charts on the Brexit issue (click on the tweet to scroll through them).
Is the UK going to vote for Brexit? Four charts worth paying attention to https://t.co/uaIPSVlFy3 pic.twitter.com/9eJmFhEEgI
12.49pm BST
Jeremy Cook, chief economist at currency firm World First, reckons the pound could fall sharply in the next couple of weeks.
He says the pressure on sterling has intensified, now that several polls are showing the Leave side in the lead.
“Sterling and Brexit remain odds; falling together like Icarus on a hot Monday in London. With 3 weeks to go I do not think it is incorrect to say that it is anyone’s to win; Leave have the momentum and opinion polls are frankly a mess; the differential between online and telephone polling has broken down. Given the level of campaigning, which has been abysmal, it is no surprise that polling is so confused; the electorate is confused and I think polls are showing more of an off-the-cuff-which-way-the-wind-is-blowing-at-this-particular-moment voting intention, not longer held beliefs. In this atmosphere momentum is key; the Remain camp has to get agitated.”
“It seems to be however that the economy is not what agitates British voters anymore and once someone makes immigration their top voting priority there is little than can shift that, regardless of how much of a monetary hit may be forthcoming.”
12.22pm BST
Although the pound is down, shares in London have actually risen to a one-week high today.
12.13pm BST
Here’s our news story on today’s Remain campaign event:
David Cameron: Leave campaign being 'reckless' with people's future https://t.co/ITdrwABVJm
12.04pm BST
University of Kent professor Matthew Goodwin has crunched the latest polling:
REVISED EU Referendum avg since Purdah (8 polls):
Leave 44.5%
Remain 43.1%
Don't know 11.5%#EUref #InOrOut #Brexit #VoteLeave #StrongerIn
11.16am BST
Breaking: ICM have just issued a poll showing that the Leave campaign hold a five-point leave over Remain, at 48% to 43%.
It’s their regular online poll, which took place after Sky News held two debates last week - one with David Cameron, and one with Leave campaigner Michael Gove.
After a fairly tumultuous week in which both Prime Minister and Michael Gove set out their stalls on TV, ICM’s weekly tracker and indeed at least two other polls published in the last 24 hours, suggest a move to Leave might have occurred.
Our poll today has Leave on 48% (+1), Remain on 43% (-1) with Don’t Knows still on 9%. This equates to a 53% vs 47% lead for Leave.
Latest ICM #EUref poll equates to 53% for Leave, 47% Remain
11.02am BST
David Cameron has been speaking at the Britain Stronger in Europe event.
Almost everyone now agrees, from the Governor of the Bank of England to the IMF, the OECD to the Treasury, 9 in 10 economists to, yes, even some Leave campaigners, there would be an economic shock if we left Europe.
Let’s be clear what that means:
Think of the impact on BMW, for example. 80 per cent of Minis are exported.
Think of the wider impact: fewer businesses, fewer jobs, a smaller economy and less money for our schools and hospitals.
Related: EU referendum live: Cameron says Brexit vote would be economic 'bomb'
10.54am BST
Today’s selloff means the pound has shed 2% of its value in the last fortnight.
Darren Ruane, head of fixed interest at Investec Wealth & Investment, says sterling is suffering the brunt of Brexit uncertainty.
Although bookmakers’ odds continue to show a victory for the Remain campaign, any signs that the vote’s result is closer than previously predicted is likely to affect the UK’s currency by the greatest amount relative to other asset classes.
Currencies are often good barometers of international investors’ confidence in the economic outlook for a country.”
10.43am BST
The YouGov report also finds that the public don’t trust certain politicians over the EU referendum.
David Cameron has particularly poor trust ratings, it appears, with 19% of those polled trusting the PM, and 72% not trusting him.
“Many Leave campaigners have cited distrust for the Prime Minister as a main reason for backing Brexit.”
10.33am BST
YouGov has also found that a majority of people back the Leave campaign, even if Brexit hit them in the pocket.
Its new poll asked people to imagine that they were £100 per year worse off after a Brexit; 44% of people said they would vote to leave, while 42% would vote to remain.
10.21am BST
The latest car registration figures suggest that EU uncertainty may be hitting consumer confidence.
Whether this is the result of some buyers holding off until the current uncertainty is resolved or a sign of a more stable market for new cars remains to be seen.”
9.53am BST
YouGov have just confirmed that their latest poll shows a move towards Brexit:
Latest EU referendum poll: Leave leads by four points https://t.co/Sd2GpOktFt pic.twitter.com/w5Pzdc3Kdl
9.47am BST
Labour MP Stephen Kinnock fears that the political infighting between Conservative politicians is distracting from the serious questions around Brexit.
We need a better discussion about what a post-Brexit UK would look like.... What trading arrangements we would have, the relationship with the single market. the two million British people living outside the UK.
Most of the world is outside the single market, and most of the world is doing better than the countries in the single market.
9.24am BST
The pound has fallen against every other major currency this morning, following the string of opinion polls showing the Leave side leading the referendum battle.
Bloomberg’s Garfield Reynolds writes that sterling suffered a “very ugly start” to the week:
With less than three weeks to the June 23 referendum, investors have been disconcerted as the ‘Leave’ campaign gains traction.
The currency dropped as much as 1.1% to $1.4353 on Monday and was down against all 16 major peers, while one-month volatility surged to 21.34 percent, a level last seen in February 2009.
9.11am BST
This chart highlights how the pound has weakened against the euro in the last couple of weeks, hitting a three week low today (the blue line):
Sterling also going weaker this morning on some more too-close-to-call opinion poll releases. pic.twitter.com/Sax3BMd8jK
9.11am BST
James Appleyard of risk management group Maplethorpe also expects a lot more sterling volatility:
17 days to go until #EUreferendum... Expect the value of £ #sterling to ebb and flow as more and more polls are released ahead of 23rd June.
8.51am BST
Our rivals at the Daily Telegraph have also helped to send the pound sliding today, analysts say.
A survey of almost 19,000 Telegraph subscribers found that 69% are intending to vote for a Brexit at the June 23 referendum. The poll also found that Leave campaigner Boris Johnson is their favoured candidate to succeed David Cameron as prime minister.
This was the most shocking survey released so far, and with only 18 days until the referendum the GBP is extremely sensitive to opinion polls. YouGov and TNS online polls didn’t help either as both revealed that the leave campaign has picked up momentum and now leads over remain voters.
Monday's Telegraph front page:
Cameron joins Left in attack on Boris#tomorrowspaperstoday #bbcpapers pic.twitter.com/XBQtywPT5G
8.45am BST
Sterling is likely to experience wild swings in over the next few weeks, in the run-up to the referendum.
Craig Erlam, senior market analyst at foreign exchange company OANDA, explains:
“The polls are likely to make people rather uneasy and we can see that quite clearly today in the pound.
“With both sides likely to step up their game over the next couple of weeks, I imagine we’ll see a lot more volatility in the pound and the closer the polls get, or if ‘Vote Leave’ continues to push ahead, the pound may find itself back towards April’s lows before too long.”
8.44am BST
The pound’s early morning slide came as the Remain campaign prepares to accuse the Leave side of trying to con voters about the consequences of Brexit.
My colleague Claire Phipps explains:
David Cameron might not want to face fellow Conservatives in debates over Britain’s future but today he’ll issue a statement with politicians usually found on the opposite side of the Commons, teaming up with Labour’s Harriet Harman, Lib Dem leader Tim Farron and Green party leader Natalie Bennett to label the Brexit campaign a “con-trick”.
Together they’ll accuse Leave campaigners – including the prime minister’s own party chums Michael Gove and Boris Johnson – of producing “contradictory statements” about Britain’s economic future outside the EU, saying the Brexiteers have put forward 23 different positions on the alternative to the single market.
Related: EU referendum live: Cameron teams up with rivals to accuse Leave campaign of 'con-trick'
In a joint intervention, the general secretaries of Unite, Unison, the GMB and Usdaw were among 10 trade union leaders warning that the Conservatives would “negotiate away our rights” if the UK decides to leave.
They argued leaving the EU would pose a great threat to maternity and paternity pay and leave, the right to paid leave for holidays and equal treatment for full, part-time and agency workers.
Monday's Guardian front page:
Unions warn of Brexit threat to working rights#tomorrowspaperstoday #bbcpapers #euref pic.twitter.com/sNnrg94mcC
8.29am BST
Shares in UK housebuilders are under pressure this morning, matching the slide in sterling.
Berkeley Group, Persimmon, Barratt Development and Taylor Wimpey are the biggest fallers on the FTSE 100 this morning.
UK house builders not liking the gains being shown in UK #Brexit polls for #Leave campaign pic.twitter.com/5n5xHoaNkx
8.20am BST
Traders are scrambling to protect themselves against the pound plunging after this month’s referendum.
The cost of insuring against sterling volatility has hit its highest level since the wild days following the collapse of Lehman Brothers.
One-month implied sterling volatility, or the price of insuring against swings in the pound against the dollar, has jumped to 21.9, the highest since February 2009. It hasn’t topped 15 in six years.
8.09am BST
Sue Trinh, head of Asian foreign-exchange strategy at Royal Bank of Canada in Hong Kong, says the EU referendum could easily roil global markets.
“A ‘Leave’ vote would expose a host of uncertainties.
“It would be more negative for the euro and the EU since the issue will drag on for other members.”
Pound hits 3-week low after new #Brexit polls show more people want to leave EU https://t.co/Saz1rlffJV pic.twitter.com/RVeHgiQOhV
7.46am BST
The pound is sliding this morning after a string of opinion polls gave the Brexit campaign a lead in the 23 June EU referendum.
Sterling tumbled in early trading, shedding more than 1.5 cents against the US dollar. It has hit a three-week low of $1.4355, down 1.1%.
The leave campaign has picked up momentum and taken a three-point lead over remain in the latest Observer/Opinium poll on the EU referendum. The Brexiters now stand on 43%, while 40% say they support the campaign to keep the UK in the union.
The poll suggests the remain camp has lost four percentage points in the last two weeks, during which Boris Johnson and Michael Gove have relentlessly campaigned on the theme of immigration.
The pound looks set to start the week on the back foot as the opinion polls continue to point to an increasingly close contest in the UK referendum as speculation increases about further gains in the polls for the leave camp.
7.32am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
There’s a new bout of jitteriness in the City today, after last Friday’s US employment report missed expectations by a mile. The news that just 38,000 new jobs were created in America last month has sparked fresh worries about the global economy.
The chance of a July hike dropped from 65% on Friday morning to 32% by Friday afternoon,which seems reasonable, but Yellen’s speech today could push that back above 50% or closer to zero, so either way, the chance for a US dollar move seems high.
German factory orders not looking pretty...-2% in April vs est -0.5%. exports drop. But after strong March
Italy's 5 Star Movement storms ahead in Rome mayoral vote. Does not bode well for crucial Renzi referendum in Oct. https://t.co/gTtgRinMtf
#Italy's risk spreads jump over #Germany as anti-establishment 5-Star flourishes in Rome. https://t.co/yjbpH9NJGM pic.twitter.com/zLHjkri3LL
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