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    GBP/USD inter-markets: ‘Brexit’ does matter Pablo Piovano

    Despite yesterday’s small pullback, Sterling keeps its impressive rally well and sound ahead of the EU-UK Referendum (Thursday), advancing more than seven cents since last week’s troughs in the 1.4000 neighbourhood.After a brief test of the 1.4780 area on Tuesday, Cable has now faded part of those gains although it remains firm around the 1.4700 handle. Poll results in general favouring a ‘Bremain’ scenario have been behind the sudden change in sentiment since last Friday, propping up the ‘needle-like’ upside to the vicinity of the 1.4800 handle.The up move continues to find extra support from UK yields - where the 5-year and 10-year remains in the upper end of the recent range - and volatility gauged by VIX, which seems stabilized after yesterday’s uptick and reinforces at the same time the global risk-on theme.Of course the current scenario is susceptible to abrupt changes depending on tomorrow results from the UK referendum, which carries the potential to be ‘the’ driver for the British pound in the next months.

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