Brexit: Sterling hits a three-week low as leave camp gains in poll
- Another poll favouring the Leave camp has been released
- The GBPUSD market is likely to be choppy for now
- UK shares made gains, although supermarket share prices retreated
By Saxo APAC Sales Trading
Despite the strong drop in US dollar against literally all currencies, GBP dropped to a three-week low following another poll this weekend favouring the Leave camp.
All the vols are trading much higher and close to the year highs again following another Poll favouring a leave outcome to the June 23 vote.
From three momth to 1 year, the curve is 2 Vols higher with the 3M ATM being now at 14.76 for example compared to 12.4 the start of last week. The one month ATM has surpassed the high of the year at 21.4 and the day itself of the vote is pricing 97% in Vol
UK rates drop
UK rates dropped more than 6% following the remaining global rates after the release of the disappointing nonfarm payroll number. The market is now pricing in a 24.4% of chance for a rate cut in August and 40% in December
Equities make gains
The FTSE finished slightly up but supermarkets became the biggest casualties on the FTSE as fears intensified that Asda is planning a new round of price cuts. Shares in the supermarket chain Tesco tanked 4.4% to £1.62, retailer Sainsbury’s slid 4.2% to £2.462, retailer Morrisons lost 3.8% to £1.889 and online supermarket Ocado fell 5% to £2.636.
Following gains by gold move, shares in mining company Fresnillo leapt 7.6% to £11.23 and Randgold Resources jumped 6.8% to £62.50. Miners enjoyed a rally on the back of the US dollar weakness.
Prime Minister David Cameron hit back Monday with a joint letter signed by senior figures from other political parties accusing the Leave campaign of perpetrating an “economic con-trick” on the public.
That warning came a day after former Prime Minister John Major took to the airwaves to condemn the “squalid” Brexit campaign and dismissed its most prominent supporter, former London Mayor Boris Johnson, as a “court jester.”
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– Edited by Robert Ryan