​The financial calendar is light today with FED rate expectations dominating the moves in the market overnight.Yesterday Fed’s Dudley said that the US economy could stand a rate rise in June or July, however he also said that the UK referendum poses a risk to the fed’s rate outlook. On the data front, UK CBI trends total orders is the only data to be released in European session. Canada will release retail sales and CPI later in the day. US will release existing home sales.

• Stocks: US equities closed lower overnight after the probability of a summer rate hike rose which is something not good for stocks overall as it makes the companies borrowing costs rise. Asian equities, however, opened lower and quickly rebounded. Today’s EU session saw major indices also recover some of yesterday’s losses.

• Currencies: Hawkish comments from Fed’s Dudley failed to boost the value of USD, even though EUR/USD broke 1.12 for the first time since late March. However as the day continued, the USD gave back its gains especially against the JP which rose above 110. 17 days ago it was trading at 105.45 as a point of reference. The market is now pricing 60% probability of a 25bp rate hike in June and 80% probability of a rate hike in September. The higher USD weighed on commodity prices and thus took its toll on commodity currencies AUD, CAD, NOK, NZD as well as major emerging market currencies yesterday.

• Oil and Gold: Crude oil’s retreat to 47.25 yesterday was also brief as it’s now back at 49 however selling pressure might emerge as we get closer to the $50 level. Oil prices rose in early trading on Friday as turmoil in Nigeria, shale bankruptcies in the United States and crisis in Venezuela all contributed to tightening supplies. Gold stays soft due to strength in USD and is hovering around $1250.