Good morning! Here’s what you need to know in markets on Tuesday.
The price of oil is diverging. Around 6:50 a.m. BST (1:50 a.m. ET) the price of WTI crude oil is up by 0.65% to trade at $49.65 per barrel, while the price of Brent is slipping, and is off 0.14% to $50.29. U.S. oil prices were lifted early on Tuesday by the start of the peak demand summer driving season, although international fuel markets were weighed down by rising output in the Middle East, which mostly serves Asian customers.
Asian stocks are substantially higher on Tuesday. On an index-by-index basis, Japan’s Nikkei is up by just less than 1%, while Chinese stocks are charging. The Dow Jones Shanghai is up 3.02%, while the China A50 has gained 2.58%. Hong Kong’s Hang Seng is 1.4% higher.
There’s at least a 40% chance of a “black swan” event in the markets, according to Societe Generale. “Black swan” events are those which are unlikely to occur but, should they come about, would cause chaos on global markets.
Vladimir Putin has turned Russia into a ticking time-bomb only he can defuse. According to Nikolay Petrov, a visiting fellow at the European Council on Foreign Relations, Russian President Vladimir Putin is looking at the possible failure of his government “within the coming year”.
Investors are pulling huge amounts of money out of Asia. A net $3.2 billion left Asian equity markets, excluding Japan, during the period May 1 to 24, the largest outflow since January, data from HSBC showed. Indonesia’s and South Korea’s bond markets, heavy recipients of foreign investment until March, are now seeing chunks of inflows reverse while Asia’s currencies have also fallen quite sharply.
The latest Brexit poll has ‘remain’ 5 points in the lead. Support for Britain to stay in the European Union stood at 51%, 5 points ahead of support for a withdrawal from the 28-member bloc, an ORB poll for the Telegraph said on Monday.
Hedge funds and investment banks are commissioning their own private exit polls ahead of the EU referendum. By commissioning private polls, traders are hoping to give themselves an advantage should sterling, gilts or equities move substantially after the result of the Brexit vote, the Financial Times reports.
China is looking to back the tech sector.
President Xi Jinping has vowed to increase government support for technology companies, state media reported, in an attempt to raise the country’s competitiveness that could also further fuel concerns over protectionism.
The former CEO of insurance giant Zurich has committed suicide. Martin Senn has committed suicide six months after leaving the company under a cloud, a tragedy that comes less than three years after Zurich’s finance chief took his own life.
It’s a reasonably busy day for data in Europe. Among the numbers to be released on Tuesday include Consumer Price Inflation from the eurozone, the Italian GDP reading, and German unemployment figures.