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  • The city's infamous drinking culture not being what it once was.

  • Investors in the UK might not all get the chance to see the Brexit beer mats their Pub Chain Wetherspoons will roll out ahead of this month's referendum.

  • But not to worry, markets have entered June with enough referendum charter to leave even the most sober trader feeling light-headed.

  • Leading the way is the world's largest asset manager BlackRock, which declared itself wary of the sort of short term risk that Brexit poses to stocks.

  • That was followed by a gloomy warning of economic shocks from the OECD and a surprise poll that put 'leave' votes ahead.

  • Financial markets had virtually given up on the idea of a 'leave' vote in May,

  • resulting in a rally in the pound and in tighter spreads across peripheral sovereign bonds

  • as investors abandon the idea of a split reverberating across other discontented European regions.

  • Now, investment houses are starting sad, a little bit less sure of themselves.

  • The Chief Executive of Hermes Investment Management told investors on Wednesday that they would be wise to brace themselves for Brexit.

  • Currency traders are already taking heed and reacted to the latest poll by sending Sterling down sharply to a 2 week low against the dollar.

  • UK government bonds experienced a rally, sending yield on benchmark 10 year debt to a 2 week low of 1.37%.

  • Investors without the resources or the inclination to commission private exit polls in the manner of hedge funds

  • might be inclined to lighten their position in so-called risk assets at this point.

  • But for those who do not believe the UK will vote to leave the European Union, the narrowing polls offer an opportunity.

  • If the UK does vote to stay, an uncertainty in the lead up could lead to a post-Brexit bounce,

  • that could lift Sterling, raise equity prices, and tighten bond spreads in countries such as Italy, Portugal, and Spain.

  • This is the sort of easy calculation that can even fit on the back of a beer mat.

The city's infamous drinking culture not being what it once was.

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B1 FinancialTimes brexit sterling referendum rally poll

Beware the Brexit brew | Short View

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    Kristi Yang posted on 2016/06/08
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