Market Review, July 13, 2016

Yesterday’s most significant move in the market was that of the yen.

USD/JPY surged completing a massive two-day rally, upon confirmation that former Federal Reserve chair Ben Bernanke met with Japan prime minister Shinzo Abe to discuss ways to help one pf the world’s top economies avoid deflation.

The currency pair soared and settled at 104.75 after the close of the U.S. afternoon trading, up 1.89% on the day. Since Abe’s Liberal Democratic Party (LDP) triumphed in a landslide upper house election over the weekend, the U.S. Dollar has soared more than 4% against the Yen, nearly returning to pre-Brexit levels from late last month.

GBP/USD advanced 1.24% to 1.3151, rebounding from the post-Brexit 31-year low of 1.2794 set last Wednesday. Sterling found support as investors reacted to the news that Britain’s home secretary Theresa May would soon replace David Cameron as prime minister, removing some of the political uncertainty that has hit the currency in the wake of the June 23 vote to leave the European Union.

Bank of England Governor Mark Carney said Tuesday there will be no “credit crunch” after Brexit, because banks will have funds available to lend. The BoE is to hold its next monthly Monetary Policy Committee meeting on Thursday amid some expectations for a rate cut, but most analysts are expecting a first rate cut only in August.

Gold fell 1.55% on the session yesterday in broad risk-on trade damping the precious metal’s demand as a safe-haven asset. Since opening the year around $1,075 an ounce, Gold has surged more than 27% over the first seven months of 2016.

Crude surged more than 4%, bouncing from the recent losses, after OPEC predicted in its first 2017 forecast that the demand for global oil will exceed production levels of crude next year, helping ease investors’ sentiment regarding the long-term implications of a massive supply glut on worldwide energy markets. During the Asian trade curde prices dropped due to weak API report showing a surprise build, dropping 0.56%.

Dow and S&P 500 hit all-time closing high, completing post Brexit rally.