After two days of heavy selling much of which was due to the unravelling of ridiculously off-side stances in the market, some of the panic surrounding Brexit has started to subside. The first sign of that came yesterday when GBP refused to fall further in the face of credit rating downgrades from two agencies (A&P and Fitch), and then was confirmed by a rebound in European and US stocks. Despite calls for a quick exit from unelected EU leaders and third parties, it appears that cooler heads are likely to prevail and a measured exit process looks more likely. A 2-day EU summit is underway with UK PM Cameron confirming that decisions will be made by the next PM and Cabinet who are expected to take over in September. The Labour party also appears to be in disarray with their Leader Jeremy Corbyn apparently unwilling to step down even though a non-confidence vote of his caucus went against him 172-40. It looks like Labour is also setting up to pick a leader in September although in this case, Corbyn would be one of the candidates. This means not much is likely to happen over the summer with Brexit discussions likely to heat up again at the same time as the US election campaign this autumn. The big selloff had left UK and other markets technically oversold and today they staged a nice trading bounce on short-covering and bargain hunting. Better than expected headline US GDP and consumer confidence also helped to boost spirits. The FTSE outpaced the Dax to the upside 2.6% to 1.9% indicating the street recognizes the pound’s plunge has make shares of UK multinationals cheap relative to their peers, and also that the UK is likely to come out of this in better shape and more competitive than the EU. Crude oil also participated in the rebound with Brent and WTI gaining 2.5%, while copper has gained 2.1%. Oil has continued to climb in late afternoon trading following another bigger than expected drawdown in US API crude oil inventories. On the other hand, gold fell 0.7% while JPY fell against USD, 0.9% against EUR and 1.5% against the pound rebound. This indicates that some of the capital that fled into defensive havens has started to work its way back out into other markets. AUD and NZD are also benefitting from capital flowing back into resource markets. JPY may remain in focus through the next few days with many of Japan’s main monthly economic announcements on the way starting with retail sales today. Traders will likely focus on whether monetary stimulus including negative rates is helping or if it has been undermined by the soaring Yen. Results may indicate how much pressure the Bank of Japan and the Abe government are under to do more. Corporate News Nike $0.49 vs street $0.48 Economic News Significant announcements released overnight include: US API crude oil inventories (3.8 mmbbls) vs street (2.2 mmbbls) US Q1 GDP update 1.1% vs street 1.0% vs previous 0.8% US Q1 personal consumption 1.5% vs street 2.0% US Q1 core PCE inflation 2.0% vs street 2.1% US consumer confidence 98.0 vs street 93.5 US Richmond Fed (7) vs street 3 Upcoming significant economic announcements include: (Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore) 9:50 am AEST Japan retail sales street (1.6%) 7:00 am BST UK Nationwide house prices street 4.9% 8:00 am BST Spain consumer 1:00 pm BST Germany consumer prices street 0.3% 10:30 am EDT US DOE crude oil and gasoline inventories