Coming down to it
There is really only one show in town this week but you probably didn’t need me to tell you that. 3 more days of campaigning and 30 million odd votes cast on Thursday will decide the fate of this referendum, hopefully once and for all.
Our sterling update this afternoon will lay out more of what we expect through the coming week but sterling has crept higher through Friday and the overnight Asian session as more recent polls have suggested a swing to Remain. Some are pointing to the continued uncertainty over the economy as a factor, while some are still focusing on the tragic death of Labour MP Jo Cox. In the grand scheme of things we always see polls tighten up the closer we get to D-day.
Not a done deal
Bookies odds have once again moved in favour of Remain with a 65-70% probability of victory according to the betting. Bookies have been wrong in the past of course, most notably at last year’s General Election and so to say that the Bookies have ‘called it’ is somewhat erroneous.
We are expecting sterling to remain volatile within a range this week although we have very little idea as to what Thursday night may bring apart from the certainty of chewed fingernails, jittery traders and some strange market moves.
The broad complacency of markets in a Remain vote could easily be undone of course and new, fresh polls will be published every day between now and the vote. A couple of polls with Leave in the ascendancy and the gaps higher in sterling will be closed in short order.
Risky assets are higher this morning with AUD, NZD and ZAR all benefiting from the lift in sentiment. The positivity is also showing up in emerging markets and also the euro.
How long the positivity will last will depend on those polls.
Have a great day.