The main highlight today will be Canadian CPI data for the month of May, released later in today’s New York Session. Headline CPI m/m is expected to increase to 0.5% from a prior 0.3%, however headline CPI y/y is expected to decline to 1.6% from 1.7%. Core CPI is expected to increase to 0.3% from 0.2% m/m and to 2.1% from 2.2% y/y. Although an initial reaction will be seen from any deviation, for a sustainable move any deviation should be supported by direction in oil prices.
Yesterday saw a massive reversal in the Brexit-induced moves that had played out since the BoJ announced they would remain on hold. GBPJPY rallied 440 pips after falling over 520 on the day. EURJPY rallied 260 after falling nearly 400 on the day. The marked turnaround in sentiment is a taste of the extremely high volatility that we can expected heading into the referendum. We can expected massive swings of multiple times the average daily range in GBP, EUR and JPY as the referendum draws near and the votes are counted.