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    The EU Vote

    The British vote on EU membership is too close to call and traders are exercising an abundance of caution before what could be an epoch making decision in modern European history or nothing at all.  

    An average of the  polls carried out between June 10th and the 18th is dead even.

    Two polls released on Wednesday showed a slight lead for the ‘Leave' camp. The Opinium survey had departure ahead 45 percent to 44 percent and the TNS poll 43 percent to 41 percent. 

    Sterling lost about 130 points from 1.4774 to the day's low 1.4642 as the above polls were reported. But by the end of the day the pound had gained most of that back closing at 1.4752. 

    Equities in the U.S. retreated modestly with most to the losses coming late in the session. The Dow Jones industrial average dropped 48.9 points, or 0.27 percent, to 17,780.8. The S&P 500 lost 3.45 points, or 0.17 percent, to 2,085.45 and the Nasdaq Composite slipped 10.44 points, or 0.22 percent, to 4,833.32.

    Since June 16th when Labor MP Jo Cox, a 'Remain' supporter was murdered, the sterling has jumped 5 percent against the dollar. The market assumption was that the subsequent three day campaign pause would favor the 'Remain' side, blunting what had appeared to be the momentum for departure. In the days before Ms Cox's death five of seven polls had varying leads for departure of from one to ten points. 

    The British polls are open from 7 am to 10 pm local time and with a record 46.5 million Britons registered to vote and with no exit polling measuring the direct vote, everyone will have to wait as the results are tabulated. British exit polling gauges the difference in the vote, the swing, from the prior election.  In national elections for Parliament that is accurate, but this is a very different case.

    The last national referendum on the EU was held in 1975.  A comparison to those results would be pointless considering the change in the U.K. in the last 41 years.

    If the vote is as close as expected, it will be a long, and volatile night.  

    Joseph Trevisani

    Chief Market Strategist

    WorldWideMarkets Online Trading

    Charts: Bloomberg

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