The day markets have been waiting for over 6 months is just around the corner, will Britain’s vote to stay in the EU or to leave? With the most recent poll from ORB showing the remains in front at 54 % while the exits are at 46% and the Times online BBC debate polls showing that 34% saw the remain campaign winning the debate and 39% saw the leave camp winning the debate, we can confidently say that the vote is still up for grabs by either side.
There are strong advocates for either side and the British people are all but split on which side to take. There are several high profile people advocating for either side, most notably for the remains is George Soros who has said that to leave EU is to commit financial suicide as the British public will lose wealth over night as the UK depreciates. On the exit side we have Ex-London Mayor Boris Johnson advocating that to leave for the EU would mean a stronger UK, with a return of sovereignty and more rights in the international markets.
Should the UK voters opt to stay in the EU, experts expect the Pound and EUR to strengthen with the POUND likely to outpace the EUR gains as it is expected to appreciate by roughly 5 to 10 % in the wake of a remain vote. Safe haven assets, which have seen a rise leading up to the vote, will be sold aggressively as we see the JPY and Gold depreciate significantly.
However, should the UK vote to leave the EU, we would expect the Pound and EUR to weaken across the board with some analysts predicting a drop of between 10 to 15% in currency values. While it is expected that money will flow into safe haven assets such as GOLD and the YEN boosting both as investors look for a safe place to park their money.
One thing is for sure, whatever the outcome, extreme volatility and profit opportunities will present themselves from the time leading up to the vote and till the end of the week and month as the vote outcome is digested by markets.
Other news expected to cause a stir in markets today are as follows:
- Any and all news regarding the BREXIT vote
- Core Retail Sales m/m expected at 0.7%
- Retail Sales m/m expected at 0.8%
- Fed Chairman Yellen continues her testimony at the semi-annual Monetary Policy Report briefing.
- Existing home Sales expected at 5.53M
- Crude Oil Inventories expected at -1.3M