Walloped again

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Leave campaigners insist that Andy Murray could have won the French Open if Britain were outside the EU. Proponents of Remain claim the new Top Gear proves the need for skilled migrant workers.  Investors say they don't like the uncertainty created by the argument.

Sterling opened lower in the Far East this morning as investors marked down the pound after two weekend opinion polls put Leavers ahead of Remainers for the EU referendum. YouGov said Leave was ahead by 45% to 41%; Opinium put the gap at 43%-40%. The pound's losses this morning include a cent each to the euro and the US dollar.

Compared with Friday's opening levels the picture for sterling looks bleaker, with an average -1.5% decline against the other dozen most actively-traded currencies. The pound lost ground on most fronts on Friday even though the UK services sector purchasing managers' index was higher than expected at 53.5. It was mainly the US employment data that it had to thank for those losses.

Payrolls plunge

Having expected to see US nonfarm payrolls increasing by a monthly 160k in May, investors were more than a little taken aback when they went up by just 38k. Including revisions to earlier months the number of people in work was 181k fewer than expected. The dollar took a battering. 

The low payrolls figure was so far out of whack that it was probably an anomaly. Even so, investors took it as proof that the Federal Reserve would not raise interest rates in the next two months and that there might not be any increase at all this year. 

The US dollar is consequently down by two cents on the day against the euro and lower against just about everything except the pound. The euro was the biggest beneficiary, as is often the case when investors abandon the dollar. Sterling did strengthen against the dollar on Friday afternoon, adding one US cent, but gave back all that and more this morning for a net daily loss of a dozen ticks. 

What will Janet say?

Conveniently, Federal Reserve Chairperson Janet Yellen will be making a speech today (albeit not until London has shut up shop for the day). Markets will be eager to hear what spin she puts on the US employment data: Will she stick to her previous guidance that interest rates will go up "probably in the coming months"?

Aside from Ms Yellen's appearance there is nothing of great importance on today's agenda. Germany has already announced that factory orders fell by -2.0% in April. Euroland investor confidence is supposed to have improved slightly in June. There are no top-tier North American data on the list and the only UK statistic is tonight's BRC retail sales monitor.

The wild card overnight will be the Reserve Bank of Australia's monetary policy announcement. Analysts mostly expect the bank to hold its Cash Rate benchmark at 1.75% but a cut cannot be ruled out.