Month: July 2016

Oil plummets more than 3% as US crude stock draw disappoints

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Oil prices sank as government data showed a far weaker US crude inventory draw than an industry report released Tuesday suggested.

US commercial crude stockpiles fell by 2.2 million barrels to a total of 524.4 million in the week through July 1, the Energy Information Administration reported.

The American Petroleum Institute (API) said its data showed US crude stockpiles fell by 6.7 million barrels last week, declining for a seventh week in a row.

Brent crude oil futures fell USD 1.71, or 3.5 percent, at USD 47.09 per barrel at 12:24 p.m. ET (1624 GMT) on Thursday. US West Texas Intermediate (WTI) crude was trading at USD 45.80 per barrel, down USD 1.63, or 3.4 percent.

The EIA data also showed gasoline inventories fell by about 100,000 barrels and distillate fuel stocks decreased by 1.6 million barrels.

Preliminary weekly data showed US production fell by 194,000 barrels per day, primarily due to declines in Alaska’s output. Monthly data that operates on a significant lag is more accurate.

Prices had earlier risen on Thursday, drawing support from the API report and a weaker US dollar, which makes oil more affordable for holders of other currencies.

“Oil demand growth remains robust,” UBS said in a note, adding that “an historically high level of physical inventories … is no bar to a rising price if the direction of travel in market adjustment is supportive.”

The bank raised its price forecasts for 2016 and 2017.

However, traders warned that an economic slowdown and a glut in supplies of refined products were weighing on oil markets.

The EIA data may compound concerns about the fuel glut. The data showed gasoline supplies rose by 46,000 barrels per day to more than 9.75 million barrels per day.

Asian crude demand is slowing and by some measures falling, which market participants said could be due to an economic slowdown and perhaps even more permanent structural changes.

“Growth is slipping again … and things don’t seem quite so rosy,” HSBC said in a note to clients.

While both stocks and sterling climbed on Thursday, oil industry observers warned that fall-out from Britain’s vote to leave the European Union last month could weigh on oil prices if the market turmoil spread outside Europe.

German industrial output plunged unexpectedly in May for its steepest monthly drop since August 2014, data showed on Thursday, suggesting Europe’s largest economy lost steam in the second quarter after a surprisingly strong start to the year.

On the supply side, Libyan officials said oil export terminals that have been shut since 2014 could open again soon, potentially restoring 600,000 barrels per day of crude export capacity.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

‘Brexiteer’ Gove knocked out of race to be new UK prime minister

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

June pvt sector jobs rose by 172,000 vs 159,000 expected: ADP

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia opens higher; ASX up 0.6%, Nikkei flat, Kospi gains 1%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian markets opened modestly higher on Thursday, likely taking cues from a stronger finish in the US, helped by rising oil prices and the release of dovish Federal Reserve minutes.

Australia’s ASX 200 was up 0.58 percent, boosted by gains in the energy, materials and the heavily-weighted financials sub-indexes. In Japan, the Nikkei 225 was near flat at 15,374.37, while across the Korean Strait, the Kospi was up by 1 percent.

Major indexes in the region had sold off in the previous session on global growth concerns that saw a flight to safety.

“Calmer heads seem to have prevailed in the US and we are once again seeing a situation where the U.S. economy is seemingly looking OK, while the U.K. and Europe are showing increasing signs of fragility,” Chris Weston, chief market strategist at brokerage firm IG, said in a Thursday morning note.

Major US indexes finished higher. The Dow Jones industrial average closed up 78 points, or 0.44 percent, at 17,918.62, the S&P 500 closed up 11.18 points, or 0.54 percent, at 2,099.73, and the Nasdaq composite was up 36.26 points, or 0.75 percent, at 4,859.16.

Stateside, data showed the pace of growth in the country’s service sector increased in June by the fastest pace in seven months.

“If we went off this report alone, then the Federal Reserve would be putting rates up today, but that is clearly not the case with the May trade balance and dovish (yet largely redundant) set of FOMC minutes keeping the growth bulls in check,” said Weston.

The US trade deficit widened more than expected in May. Minutes from the Fed’s June meeting, meanwhile, suggested policymakers were cautious about raising rates.

Asian markets sold off on Wednesday as investors scurried into safe-haven plays on global growth concerns that sent bond yields to record lowers. Worries were spurred by poor US factory orders data, Chinese Premier Li Keqiang’s Monday remarks suggesting China may not maintain its 6.7 percent growth rate, and renewed fears over the fallout from the Brexit vote.

In the currency market, the dollar traded at 96.097 against a basket of currencies, coming off levels near 96.290 it traded at on Wednesday afternoon Asia time.

The Japanese yen, a safe-haven currency, traded at 101.21 against the greenback, after touching the 100 handle in the previous session and levels near 103 on Friday. Analysts said the fresh strength in the yen seen on Wednesday was due to a flight to safety amid jitters across financial markets.

The British pound traded at USD 1.2921 as of 8:27 a.m. HK/SIN on Thursday. The Cable dropped to a fresh 31-year low of USD 1.2796 on Wednesday amid persistent uncertainty surrounding the UK’s future as a result of its decision to leave the European Union.

Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, said the further drop in the sterling was due to “nothing more than thin liquidity conditions.”

“Ultimately sterling is headed lower as bad news worsens,” Lien added. “Brexit puts significant stress on the financial sector and property funds are the first to feel the pain. Other sectors will start to implode, edging the UK economy and British pound lower.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia markets tumble as investors scurry into safe-haven plays

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Markets in Asia sold off on Wednesday, as investors scurried into safe-haven plays on global growth concerns, sending bond yields to record lows. Renewed Brexit jitters also sent the British pound tumbling to a fresh 31-year low.

The British pound traded at USD 1.2898 as of 2:00 p.m. HK/SIN, after dropping to a fresh 31-year low of USD 1.2796 earlier.

The tumble began overnight as investors flocked to safe-haven assets such as US Treasurys, the yen and the greenback after three UK real estate funds halted selling and the Bank of England relaxed regulations to encourage banks to lend out more money.

Japan’s Nikkei 225 closed down 290.34 points, or 1.85 percent, at 15,378.99, after earlier tumbling as much as 3.2 percent on the back of fresh yen strength. The Japanese yen, a safe-haven asset, traded at 101.04 as of 2:02 p.m. HK/SIN, after the pair traded as low as 100.56 earlier and compared with levels near 103 on Friday.

“There’s a high level of complacency in dollar/yen trade as the markets have no defined direction other than chasing risk sentiment,” said Stephen Innes, a senior trader at OANDA. “I expect further probes lower as the latest Brexit sell-off is simply the tip of the iceberg.”

The yen strength saw Japanese exporters decline, with shares of Honda closing down 4.55 percent, Toyota down 1.73 percent and Nissan down 2.01 percent.

Australia’s ASX 200 closed down 30.50 points, or 0.58 percent, at 5,197.50, with the energy, materials and the heavily-weighted financials weighing. South Korea’s Kospi dropped 36.73 points, or 1.85 percent, to 1,953.12, while Hong Kong’s Hang Seng index tumbled 1.75 percent in afternoon trade.

On the Chinese mainland, the Shanghai composite was flat.

“The heady post-Brexit rally looks to be at an end, with all major US and European markets down overnight except the FTSE 100, which moved higher only as a response to the further decline in the pound,” said Angus Nicholson, a market analyst at spreadbettor IG.

Among safe-haven assets, the dollar advanced against a basket of currencies to trade at 96.357, compared with the 95.631 level on Tuesday during Asian hours.
“We saw investors flock into the safety of US dollars as the liquidation spread to stocks, commodities, the euro, Australian and Canadian dollars,” said Kathy Lien, managing director of foreign exchange strategy at BK Asset Management.
The yield on the benchmark 10-year Treasury touched new lows during Asian hours, falling as low as 1.345 percent, extending overnight declines and marking an all-time low, according to Reuters Tradeweb data which goes back to 1953.

Analysts expect Treasury yields to continue their decline and for the coupon curve to flatten.

Mark Cabana from Bank of America Merrill Lynch said in a note there will be two key drivers of Treasurys: “First, a flight out of gilts by risk-averse foreign investors should benefit Treasurys … second, attracting global liquidity when real rates are constrained and monetary policy is considered ineffective is not good news for inflation expectations,” he said.

The yield on the 10-year benchmark gilt was 0.771 percent, down from levels above 1.0 percent last week.

In Japan, the yield on the 10-year Japanese government bond (JGB) fell as low as negative 0.281 earlier in the session before climbing back slightly to negative 0.264. Reuters also reported the yield on the 20-year JGB turned negative for the first time on Wednesday, falling to negative 0.005 percent.

Gold prices advanced, with spot gold up 1.06 percent at USD 1,370.00, compared with levels near USD 1,320 in the previous week. Gold miners in Australia bucked declines in the broader market to trade up; Newcrest shares advanced 3.26 percent, while Evolution Mining was up 6.32 percent.

Adding to risk aversion, stateside data showed factory orders declined 1 percent in May after two straight months of increases. The highly anticipated nonfarm payroll report is due Friday.

Elsewhere, in a speech on Monday, Chinese Premier Li Keqiang said it would not be easy for China to achieve a growth rate of 6.7 percent in the first quarter, according to Xinhua News Agency.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Europe stocks slide amid Brexit fears; Pound dives to 31-yr low

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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European stocks opened lower on Wednesday as fears over political and economic uncertainty in the European Union (EU) following the Brexit vote return to global markets.

The pan-European STOXX 600 was down 0.72 percent.

Growing anxiety about the fallout of the UK’s vote to leave the EU has continued to plague markets. Markets in Asia were trading sharply lower on Wednesday, as investors scurried into safe-haven plays on global growth concerns, sending bond yields to record lows.

As a result of the growing uncertainty, the British pound also dropped to a fresh 31-year low amid Brexit concerns, trading at USD 1.2880 around 5.30 a.m. London time after dropping as low as USD 1.2796 earlier.

The tumble began on Tuesday as investors flocked to safe-haven assets such as US Treasurys, the yen and the greenback after three UK real estate funds, Standard Life, Aviva and M&G Investments halted redemptions and the Bank of England relaxed regulations to encourage banks to lend out more money.

Concerns over the ramifications of the vote and about global growth prompted US stocks to close lower on Tuesday amid record lows in the benchmark 10-year Treasury yield.

In other news, UK Home Secretary Theresa May has taken the lead in the race to find a new Conservative party leader and British Prime Minister. May came top in a first round of voting on Tuesday, Liam Fox was eliminated from the race with the fewest amount of votes and Stephen Crabb pulled out of the leadership race leaving May, Andrea Leadsom and Michael Gove to face another round of voting Thursday.

Italian banks remain in focus for investors. Trading in shares of Banca Monte dei Paschi di Siena was halted during Tuesday’s session afterthe European Central Bank asked BMPS to slash its bad debts by over 40 percent in three years, Reuters reported.

Late on Tuesday, market watchdog Consob said short selling of BMPS shares would be banned in Wednesday’s trading session, Reuters added.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

UK pound falls under $1.28; Asia stock markets tumble

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Markets in Asia were sharply lower on Wednesday, as investors scurried into safe-haven plays on global growth concerns, sending bond yields to record lows. Renewed Brexit jitters also sent the British pound tumbling to a fresh 31-year low.

The British pound dropped to a fresh 31-year low early Wednesday amid Brexit concerns, trading at USD 1.2860 as of 11:04 a.m. HK/SIN, after dropping as low as USD 1.2796 earlier.

The tumble began overnight as investors flocked to safe-haven assets such as US Treasurys, the yen and the greenback after three UK real estate funds halted selling and the Bank of England relaxed regulations to encourage banks to lend out more money.

Japan’s Nikkei 225 dropped 2.96 percent, after earlier tumbling some 3.2 percent on the back of fresh yen strength. The Japanese yen, a safe-haven asset, traded at 100.71 against the dollar as of 11:04 a.m. HK/SIN, compared with levels near 103 on Friday.

“There’s a high level of complacency in dollar/yen trade as the markets have no defined direction other than chasing risk sentiment,” said Stephen Innes, a senior trader at OANDA. “I expect further probes lower as the latest Brexit sell-off is simply the tip of the iceberg.”

The yen strength saw Japanese exporters tumble, with shares of Honda off 5.9 percent, Toyota down 3.09 percent and Nissan down 3.82 percent.

Australia’s ASX 200 was down 1.40 percent, with the energy, materials and the heavily-weighted financials sub-index weighing. South Korea’s Kospi dropped 2.02 percent, while Hong Kong’s Hang Seng index tumbled 1.85 percent.

Mainland Chinese markets were lower, with the Shanghai composite off 0.15 percent.

“The heady post-Brexit rally looks to be at an end, with all major US and European markets down overnight except the FTSE 100, which moved higher only as a response to the further decline in the pound,” said Angus Nicholson, a market analyst at spreadbettor IG.

Among safe-haven assets, the dollar advanced against a basket of currencies to trade up 96.382, compared with the 95.631 level it traded at on Tuesday during Asian hours.

“We saw investors flock into the safety of US dollars as the liquidation spread to stocks, commodities, the euro, Australian and Canadian dollars,” said Kathy Lien, managing director of foreign exchange strategy at BK Asset Management.

The yield on the benchmark 10-year Treasury touched new lows during Asian hours, falling as low as 1.345 percent, extending overnight declines and marking an all-time low according to Reuters Tradeweb data which goes back to 1953.

In Japan, the yield on the 10-year Japanese government bond fell as much as negative 0.271 earlier in the session before climbing back slightly to negative 0.269.

Gold prices advanced, with spot gold up 0.88 percent at USD 1,367.56, compared with levels near USD 1,320 in the previous week. Gold miners in Australia bucked declines in the broader benchmark index to trade up; Newcrest shares advanced 2.79 percent while Evolution Mining was up 7.04 percent.

Adding to risk aversion, stateside data showed factory orders declined 1 percent in May after two straight months of increases. The highly anticipated nonfarm payroll report is due Friday.

Elsewhere, in a speech on Monday, Chinese Premier Li Keqiang said it would not be easy for China to achieve a growth rate of 6.7 percent in the first quarter, according to Xinhua News Agency.

On Tuesday, the Bank of England governor, Mark Carney, sent a clear message to Britain’s cautious bankers: They needed to start lending more money. The central bank cut the amount of capital it required banks to hold in reserve, which freed up an extra 150 billion pounds (USD 196 billion) for lending.

Rodrigo Catril, a currency strategist at the National Australia Bank, said the pound had a small reaction to Carney’s comments and the sell-off was part of a global flight to safety. “Fears of financial contagion have triggered a demand for safety, dragging core global yields to new historical lows,” he said.

Nicholson added that Carney’s words could have spooked investors further. “[His] speech seems to have initiated the dawning of realization of the longer-term impact of Brexit for many in the markets,” he said.

Fueling risk aversion was the news that UK asset managers Standard Life, Aviva and M&G Investments have suspended dealing in their UK property funds, leaving investors and fund managers worried about consequences on the broader sector.

The UK, however, has yet to invoke Article 50 of the Lisbon Treaty, which will formally start negotiations for an exit from the EU.

Currently, the ruling Conservative party is in the midst of finding a successor to Prime Minister David Cameron, who resigned following the June 23 public vote to leave the EU.

Oil prices retreated during Asian hours, with global benchmark Brent off 0.58 percent at USD 47.68 a barrel, while US futures were lower by 0.71 percent at USD 46.27.

US markets snapped a four-day winning streak as they returned to trade on Tuesday after closing Monday for the July 4 holiday.

The Dow Jones industrial average closed down 108.75 points, or 0.61 percent, at 17,840.62; the S&P 500 index was down 14.4 points, or 0.68 percent, at 2,088.55 and the Nasdaq composite was down 39.67 points, or 0.82 percent, at 4,822.90.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Emailgate: FBI recommends not bringing charges against Hillary

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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FBI Director James Comey said his office is not recommending prosecutors bring charges against Hillary Clinton for her handling of classified information in connection to private email servers.

Addressing inevitable complaints about the investigation, Comey — a Republican — emphasized that “this investigation was done honestly, competently, and independently.”

“No outside influence of any kind was brought to bear,” he said. “I know there were many opinions expressed by people who were not part of the investigation — including people in government — but none of that mattered to us. Opinions are irrelevant, and they were all uninformed by insight into our investigation because we did our investigation the right way.”

Comey began his address by explaining what investigators found during their investigation. He said that the investigation showed that 110 emails in 52 email chains were determined to include classified information at the time they were received. Within those emails, eight chains contained information that was “top secret” at the time they were sent, 36 had “secret” information, and eight more had “confidential” information, the FBI director explained.

Comey also said the FBI assessed that there was no direct evidence that Clinton’s personal email domain was hacked. It is possible, however, that hostile actors gained access, he added.

He characterized the investigation findings as showing that Clinton and her team were “extremely careless” but he said there was no clear evidence they intended to violate the law.

Still, Comey said the FBI’s recommendation is that Clinton not face criminal charges for her actions.

“Although there is evidence of potential violations regarding the handling of classified information, our judgment is that no reasonable prosecutor would bring such a case,” he said.

Comey said decisions on whether or not to bring charges are partly based on “how similar situations have been handled in the past.”

“In looking back into our investigations into the mishandling or removal of classified information, we cannot find a case that would support bringing criminal charges on these facts,” Comey said. “All the cases prosecuted involved some combination of: clearly intentional and willful mishandling of classified information; or vast quantities of information exposed in such a way as to support an inference of intentional misconduct; or indications of disloyalty to the United States; or efforts to obstruct justice. We do not see those things here.”

The FBI interviewed Democratic U.S. presidential candidate Hillary Clinton for three and a half hours on Saturday as part of the probe into her use of a private email server while serving as secretary of state, her campaign said.

The interview at FBI headquarters in Washington followed a week of intense public focus on the investigation and on Clinton’s viability as a presidential candidate, with four months to go to the election. Her campaign has tried for months to downplay the controversy as a distraction.

In an interview broadcast on MSNBC, Clinton said she was happy to do the FBI interview, which her spokesman earlier described as “voluntary.”

“I’ve been answering questions for over a year” regarding the private email server, Clinton said.

Clinton struck a positive tone about the email investigation when questioned about it by CNBC in March.

“I’m happy that everybody now has been cooperating and giving information because I think that will finally end this and show that only appropriate steps were taken,” she said at the time.

Comey’s Tuesday statement, however, highlighted the FBI’s conclusion that many inappropriate steps were taken — even if they did not warrant criminal charges in the department’s view.

“I know that the Republicans were engaging in a lot of wishful thinking, but this is not anything people should be worried about,” Clinton added in her interview with CNBC.

Clinton is expected to be formally nominated as the Democratic candidate for the Nov. 8 presidential election at the party’s convention in less than four weeks. The former secretary of state is currently the front-runner for the White House with polls showing her leading presumptive Republican nominee Donald Trump.

In a tweet on Saturday, Trump said it was “impossible for the FBI not to recommend criminal charges against Hillary Clinton. What she did was wrong!”

And on Tuesday, Trump expressed his displeasure with the FBI’s recommendation.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

BoE cuts bks capital requirements as Brexit risks ‘crystallize’

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Bank of England (BoE) announced a new measure on Tuesday to soften the financial fallout from the UK’s vote to leave the European Union (EU) last month.

The BoE said risks identified in March ahead of the referendum had “begun to crystallize.”

“The current outlook for UK financial stability is challenging,” the Financial Stability Report said.

“There will be a period of uncertainty and adjustment following the result of the referendum. It will take time for the United Kingdom to establish new relationships with the European Union and the rest of the world. Some market and economic volatility is to be expected as this process unfolds.”

Challenges ahead may include lower investor demand for UK assets, the BoE said. A decline in capital inflows could be associated with downward pressure on the exchange rate and tighter funding conditions for UK borrowers. It might also rock the UK commercial real estate market, which has previously experienced strong inflows from overseas. Foreign inflows of capital to UK commercial real estate fell by almost 50 percent in the first quarter of 2016, the BoE said.

It also warned that the UK’s highly leveraged households might struggle to repay debts should employment and income growth fall in the months following the referendum – as widely warned.

Last week, the BoE announced it would extend its indexed long-term report operations on a weekly basis until the end of September 2016 to provide extra liquidity insurance to banks.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia opens lower; Nikkei down 0.9%, Kospi down 0.3%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asia markets were broadly lower on Tuesday at the open, likely taking cues from European equities, which slid Monday on renewed Brexit concerns.

In Japan, the Nikkei 225 dropped 0.85 percent in early trade; across the Korean Strait, the Kospi slid 0.28 percent. Australia’s benchmark ASX 200 was down some 0.54 percent, with the heavily-weighted financials sub-index weighing, down some 0.76 percent.

Major Australian banks were under pressure, with shares of Westpac down some 1.35 percent. Analysts have previously told CNBC the ongoing political uncertainty in Australia was weighing on the future of the big banks.

European stocks finished lower on Monday, with the UK’s benchmark FTSE 100 off 0.8 percent. Markets in the US were closed Monday for the Independence Day public holiday.

In the UK, the ramifications of its vote to quit the European Union (EU) continued.

Nigel Farage, leader of the U.K. Independence party and a key Brexit campaigner, announced he was standing down, saying his “political ambition” had been achieved with the Brexit vote.

His departure came after another key Brexit campaigner, Boris Johnson, ruled himself out of the running to become the UK’s next prime minister. Incumbent David Cameron, a remain campaigner, said after the Brexit referendum that he would step down by October.

Uncertainty over Britain’s future, following the Brexit vote, saw Markit’s construction Purchasing Managers’ Index (PMI) for the UK drop to 46.0 in June, the lowest level in seven years.

The International Monetary Fund chief, Christine Lagarde, told a French newspaper on Monday, meanwhile, that exiting the EU could cut Britain’s gross domestic product by between 1.5 and 4.5 percentage points by 2019.

And ratings agency S&P Global Ratings said both the euro zone and the UK’s economic growth would take a knock as a result of the vote, with the agency warning that the UK would barely escape a “full-fledged recession caused by Brexit.”

The ongoing uncertainty in the UK sent the British pound lower, with Cable trading at USD 1.3265 as of 8:22 a.m. HK/SIN; this was compared to levels around USD 1.3284 on Monday afternoon Asia time.

In the wider currency market, the Japanese yen, considered a haven asset, strengthened against the dollar, trading at 102.26 in early trade on Tuesday, after weakening as much as 103.39 on Friday.

The dollar was a touch lower against a basket of currencies, trading at 95.577, compared to its last close at 95.649.

Down Under, the Australian dollar traded at the USD 0.75 handle, around USD 0.7521 as of 8:26 a.m. HK/SIN; the Aussie dropped to levels near USD 0.7438 on Monday amid the uncertainty surrounding the country’s election outcome.

Investors will continue to monitor the apparent political deadlock in Australia, after a federal election at the weekend failed to produce a clear winner. Continued political and economic uncertainty could see the country move closer to losing its vaunted triple-A credit rating.

The Aussie will also be in focus today as the Reserve Bank of Australia is set to hold its monetary policy meeting; most analysts do not expect a rate cut from the central bank today.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow