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It's day two of Yellen's testimony, markets are very calm ahead of tomorrow's U.K. vote, and Tesla makes an offer for SolarCity. Here are some of the things people in markets are talking about today.
Yellen resumes testimony
Federal Reserve Chair Janet Yellen resumes her testimony in Washington at 10 a.m. ET today. In the session with the Senate yesterday she offered a change to the inflation and job-market outlook, promising to proceed "cautiously" when it comes to raising interest rates. Economists now view that the Fed is likely to hold rates for the next couple of meetings. Market-implied odds put the chances of a hike at the July meeting at just 10 percent, with those odds not climbing above 50 percent until January of 2017.
Tesla offer for SolarCity
Tesla Motors Inc. has made an offer to buy SolarCity Corp. in an all-stock deal that has investors scratching their heads as to whether it really is the "no-brainer" Elon Musk described it as. While the combination of the two companies would offer green-energy enthusiasts a one-stop shop for their home and transport power needs, investors are concerned about the cash burn of both companies. Tesla shares were 10.2 percent lower and SolarCity shares were 16.1 percent higher in premarket trading this morning.
Calm before the vote
Global markets are again very calm this morning ahead of tomorrow's U.K. vote on membership of the European Union. The MSCI Asia Pacific Excluding Japan Index rose 0.5 percent overnight with Japan's Topix index closing 0.7 percent higher. In Europe, the Stoxx 600 Index was 0.1 percent higher at 6:05 a.m. ET while European sovereign debt was virtually unchanged. London's FTSE 100 index was 0.4 percent lower. S&P 500 futures were 0.1 percent higher.
Pound holds rally
The British pound, which has seen a huge rally in recent days, is holding onto those levels, with sterling at $1.4681 as of 6:05 a.m. ET on a morning that has seen a very tight trading range. The currency is likely to be hit quickly as results come in overnight on Thursday as it will remain trading throughout that time. One 'leave' supporter predicts it will fall to $1.32 on a vote in favor of Brexit.
Brexit hedges, volatility
Investors looking to profit from the Brexit referendum - no matter the outcome - should bet on a jump in gold volatility, according to a note from Societe Generale SA who say the metal will surge in the event of a vote to leave and fall if the result is for the status quo. The precious metal was trading at $1265.71 an ounce at 6:30 a.m. ET, down more than $30 in the last three sessions. It is certainly not just gold that will move, as markets in London are bracing for what could be a wild ride in everything from foreign exchange to stocks following the referendum result.
What we've been reading
This is what's caught our eye over the last 24 hours.
- A $541 million loss haunts Deutsche Bank and former trader.
- The lonely aftermath of China's one child policy.
- Space race heats up as India sends 20 satellites in one rocket.
- Blackberry diehards are not going down without a fight.
- Google tackles the challenge of how to build an honest robot.
- Say goodbye to the annual pay raise.
- Moody's is taking Donald Trump's economic plan seriously.