Janet Yellen © Bloomberg
Experimental feature

Listen to this article

Experimental feature

After weeks of campaigning and market anxiety investors await the results of the UK referendum on its EU membership this week.

Uncertainty surrounding the UK referendum weighed on equity markets last week. But increasingly heated campaigning for the referendum was halted after Labour MP Jo Cox died on Thursday after being shot and stabbed while meeting constituents in the northern English town of Birstall near Leeds.

While it remains unclear whether campaigning will resume, UK voters will vote on whether to remain in or leave the EU on Thursday.

“No matter which way this goes, markets will be volatile: a Remain win boost [the pound] and yields, while a Leave win likely means a sharp fall in GBP and drop in yields, but in extremely illiquid markets in which we would expect central banks to intervene verbally and/or physically,” James Rossiter, senior global strategist at TD Securities, said.

A week after the Federal Reserve opted to leave interest rates unchanged at its June meeting, while paring back its 2017 rate rise forecasts, Fed chair Janet Yellen will deliver her semi-annual testimony before the Senate Banking Committee in Washington on Tuesday. She will follow that up with her testimony before the House Financial Services Committee on Wednesday.

“We expect Yellen to reiterate the cautious message of last week’s post-FOMC meeting press conference,” Joseph Lavorgna, economist at Deutsche Bank, said.

“However, we cannot discount the risk that she will deliver a slightly more upbeat message in case she is dissatisfied with the financial markets’ interpretation of the path of monetary policy.”

On the corporate front, investors will tune into Facebook’s shareholder meeting where investors in the social networking site will vote on a proposed new class of shares that will allow founder Mark Zuckerberg to give away his wealth without giving up long-term control of the company.

Facebook proposed a class C of stock as Mr Zuckerberg’s voting control has declined from 67.2 per cent to 60.1 per cent over the past two years.

Get alerts on Federal Reserve when a new story is published

Copyright The Financial Times Limited 2018. All rights reserved.

Follow the topics in this article