Investing.com - Here are the top five things you need to know in financial markets on Wednesday, July 6:
1. Pound tumbles to fresh 31-year low below 1.28-level
The British pound remained under considerable pressure on Wednesday, hitting a fresh 31-year low against the U.S. dollar, amid the continuing fallout from the U.K.’s vote last month to leave the European Union.
The pound slid by more than 1% to hit $1.2797 against the greenback (GBP/USD), the weakest level since 1985. It was last down 0.65% at $1.2936 by 9:25GMT, or 5:25AM ET.
Cable also skidded by more than 1% against the euro to 0.8497 (EUR/GBP), its lowest since August 2013, and was last down 0.5% at 0.8541.
Against the safe-haven yen, sterling fell to 128.80 (GBP/JPY), its lowest since November 2012. It was last down 1.6% at 130.36.
The pound has lost more than 14% of its value since last month’s referendum, as investors fret about the impact on the U.K. economy and continuing uncertainty about the country’s political direction.
2. Global stock markets fall again as Brexit fears reign
Global stocks were mostly lower on Wednesday, as fears over the Brexit fallout again took a toll on markets.
Markets in Asia closed sharply lower, as a fresh bout of anxiety over Brexit risks rattled investors.
Meanwhile, European stocks sold off again, with Germany’s DAX down almost 2%, as anxiety over the U.K.’s exit from the European Union continued to cut into investor appetite for regional equities.
Elsewhere, U.S. stock market futures pointed to steep losses at the open, as investors continued to keep an eye on the fallout from the U.K.'s decision to leave the European Union.
3. Global bond yields sink to fresh record lows
Global bond yields tumbled again on Wednesday, as uncertainty surrounding global growth in wake of Britain’s vote to exit the EU sent investors flooding into safe haven assets.
The yield on the U.S. 10-year Treasury note, which moves inversely to its price, pushed lower to a record 1.321%, while the yield on the 30-year Treasury bond was down at 2.100%.
In Europe, U.K. 10-year gilt yields dropped to an all-time low of 0.736%, while German 10-year bonds yields slumped to -0.204%. The 10-year Japanese government bond yield also dropped to fresh record lows.
4. Gold jumps to 2-year high amid Brexit anxiety
Gold prices surged to the highest level since March 2014 on Wednesday, as renewed fears over the ramifications of the Brexit vote boosted demand for safe-haven assets.
Prices of the yellow metal rose by more than 1% to hit an intraday peak of $1,373.70 a troy ounce, a level not seen in more than two years. It last stood at $1,372.05, up $13.35, or 0.85%.
5. Fed minutes ahead
The Federal Reserve will release minutes of the June 14-15 policy meeting on Wednesday at 18:00GMT, or 2:00PM ET, as investors search for some clarity on where the U.S. central bank stands on its path toward rate hikes.
The Fed kept interest rates unchanged at that meeting and dialed back forecasts for how fast it will raise rates over the next couple of years, citing concerns over the economic outlook and said it was on watch for the result of the Brexit referendum.
New York Fed President William Dudley is set to speak at 12:00GMT, or 8:00AM ET, on community development challenges in Binghamton, New York, while Fed Governor Daniel Tarullo is scheduled to speak at 13:00GMT, or 9:00AM ET, on monetary policy and financial regulation.