UK-listed Miners are on the back foot today (down 1.5% to 2.7%), failing to benefit from the dollar basket weakness that tends to usher commodities higher. This as GBP/USD continues to rally (a breakout beyond 10-month falling highs no less) with bookies suggesting a UK referendum Remain vote looking more and more likely come Friday morning. So Miners are missing out not just on their usual currency benefit but also from a perception of reduced event-risk on economic growth and thus demand for materials? That’s a bad day at the coal face!

Some of today’s weakness may be attributed to simple digestion of two days of strong gains and that sharp turnaround in market sentiment. The balance could relate to Brexit polls still delivering mixed messages, ensuring the referendum result remains too close to call. Oh, and I almost forgot. Her Majesty – Fed Chair Janet Yellen – is scheduled to testify in front of the Senate Banking Committee this afternoon. Nobody really expects her to venture far from that dovish FOMC press conference script of last week. However, some are jittery that with the USD back down around June lows and Brexit fears no longer what they were, she might be in a position to offer slightly more hawkish nuggets that result in a dollar bounce?

Market expectations have already re-reduced their expectations for 2016 rate rises. Yet again. Might she give a little wave of her hawkish stick to try and avoid any ‘low rates forever’ complacency in the event of a remain vote. Does she need to? Not really. Could she? Of course. If anyone has taught us to expect the unexpected, it’s the central banks.

Mike van Dulken, Head of Research, 21 June