With arguably the biggest political event of the year occurring today, and with polls suggesting the outcome is still far from certain, the large moves in the markets may come as something of a surprise. Stock markets around the globe have continued their strong recent rally and the UK100 ( 1.26%) is showing little signs of caution in its almost unabated march higher.
After a strong surge early on the GBPUSD ( 0.06%) has pared back the vast majority of its gains and trades little changed at 1.4810 at the time of writing. The EURGBP ( 0.27%) shows a little pullback in sterling ahead of what is quite probably a seismic event for the currency. Despite polls showing both sides neck and neck it appears the markets are heavily favouring a remain outcome in the EU referendum which conventional wisdom suggests would be supportive of both the pound and risk assets around the globe.
Oil prices have also joined in on the rising sentiment with WTI ( 1.20%) homing in on the $50 a barrel level once more. Gold ( 0.04%) has experienced a quiet session today but is sure to exhibit some sharp moves on the back of the polls closing tonight at 10pm.
Elsewhere several data releases from the US this afternoon have shown contrasting fortunes for the world’s largest economy with initial jobless claims and manufacturing PMI both coming in better than forecast whereas new home sales and conference board indicators showing some weakness.
Looking ahead Brexit look set to continue to dominate for at least another 24 hours with the next related event due to be some online polls (not-exit polls) out just after voting closes at 22:00. Results should start to trickle in during the early hours of the morning with the final regions expected to have declared their outcomes by 07:00. Aside from the main event German IFO business climate is out at 09:00 and durbale goods orders are out at 13:30.
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