The pressure rises


Led Zepplin are up in court today refuting the accusation that they lifted the opening bars of Stairway to Heaven from a track by Spirit. Meanwhile, in the financial world, markets around the world are shamelessly copying the nervousness created in Britain by next week's referendum.

It is not just supporters of sterling who are feeling the strain of the upcoming vote. Investors in general have woken up to the possibility that Britain really could decide to leave the EU and they are less than sanguine about the implications of such a move. In the last few days global share prices have moved lower, along with oil, while safe-haven assets - notably gold, government bonds and the Japanese yen - have risen.

In the last 24 hours a couple more opinion polls have shown Leave in the lead and the odds against Brexit have narrowed from 2/1 to 13/8. The news was not as damaging to sterling as might have been expected, perhaps because the big-hitters intending to sell the pound have already done so. It has, after all, fallen by an average of -4% since the beginning of June. On the day sterling is indeed the weakest performer among the major currencies but it shares last place with the US dollar and the Japanese yen while the Swiss franc, the Canadian and NZ dollars and the Norwegian krone are close by.

Slim pickings

The overnight economic statistics were even thinner on the ground than expected. There were none at all during the London trading session. 

New Zealand's food price index fell by -0.5% in May. Australian business confidence slipped from 5 to 3. The Melbourne Institute's survey of Australian inflation expectations and the REINZ index of New Zealand house prices failed to appear.

This morning Japan reported that industrial production had increased by 0.58% in May and that it was down on the year by -3.3%. Both figures were better than forecast and the yen moved higher after their publication but appetite for the currency probably owed more to nervousness than it did to investors' appreciation of the production data.

Inflation distraction

This morning's UK inflation figures may provide at least a temporary distraction from the EU debate and opinion polls. The other important statistics today are the US retail sales numbers that come out after lunch.

Analysts expect the UK consumer price index to have risen by 0.4% in the year to May and by 0.3% in that month alone. The "core" inflation rate, which ignores the effect of volatile components including food and energy, is pencilled in at 1.3%. All of those numbers would be higher than the April readings. American retail sales are expected to be up by a monthly 0.3%. Other data today cover Swedish inflation, Euroland industrial production and €Z employment change.

All of those will be very interesting but they pale into insignificance alongside the Brexit debate. And this morning Rupert Murdoch has upped the ante.