A vote by Britain Thursday to leave the European Union could have "moderate direct effects" on the U.S. economy, but probably does not pose big financial risks, a top Federal Reserve official said on Monday.
If that view is wrong and a Brexit has a bigger impact on U.S. growth, all policy choices will be on the table for the U.S. central bank, Minneapolis Fed President Neel Kashkari told reporters after a panel on bank regulation in Washington.
"My outlook is for continued moderate economic growth [and] inflation gradually returning to our 2 percent target," Kashkari said, adding that he does not find it "productive" to say how many rate hikes he expects the Fed to be able to make this year.
Brits shift toward remaining in EU, new poll shows
Support for Britain remaining in the European Union stood at 53 percent with support for quitting the bloc at 46 percent, according to a poll by ORB for the Daily Telegraph newspaper.
The newspaper said this represented an eight-point net reversal from last week, when Leave held a one-point lead among definite voters with 49 per cent to "Remain's 48 per cent.
Japan Finance Minister Aso says won't intervene in FX market lightly
Finance Minister Taro Aso said on Tuesday Japan would respond to severe currency volatility in line with G7/G20 agreements, and would not intervene in the market lightly.
Aso was speaking to reporters when asked how he would respond to rapid market swings around Britain's June 23 vote on whether to stay in or leave the European Union.
"We don't intend to conduct currency intervention lightly," Aso said. "We will respond in line with our agreement at the G7 and G20 that rapid fluctuations are undesirable and stability (is important)."
The minister did not elaborate, and declined to comment on whether Japan had contingency plans in case Britain did decide to leave the EU.
Japanese officials are worried about a spike in the yen, which is perceived as a safe-haven currency during times of heightened risk aversion, in the event of a Brexit.
BOJ minutes from April meeting show some members worried about foreign risks
Some Bank of Japan policymakers said overseas economies continue to pose downside risks to Japan's economy and prices, minutes of a policy meeting held in April showed on Tuesday.
Those members also said the central bank should carefully examine these risks in the future and ease monetary policy without hesitation if needed.
At the meeting, held on April 27-28, the BOJ held off on expanding monetary stimulus even as global headwinds, a strong yen and soft consumption threatened to derail a fragile economic recovery.
Oil prices fall for first time in three days
Oil prices fell in Asian trade after a strong two-day rally that was fed by easing concerns Britain would leave the European Union after a referendum this week, allowing market participants to focus on supply issues.
U.S. crude's expiring July front-month contract CLN6 was down 17 cents at $49.20 a barrel at 0242 GMT. The more actively traded August contract CLQ6, the new front-month from Wednesday, was down 16 cents at $49.80. That contract settled up nearly 3 percent at $49.96 on Monday.
Brent crude futures' August front-month contract LCOc1 was down 25 cents at $50.40 a barrel.
On Monday, it climbed $1.48, or 3 percent, to $50.65 a barrel. The contract has risen about 7 percent since Thursday's settlement, after dropping 10 percent in six previous sessions.
While concerns over a British exit fade into the background, however briefly, supply issues are back in focus.
Saudi Arabia's crude oil exports dropped in April despite high production levels, suggesting its battle for market share against U.S. shale drillers may be running its course.
Reference: CNBC,Reuters
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