Oil has hit a 15-month high on the back of optimism over the Opec deal which needs to be sorted out by November 30. But, with a record long position building across the combined benchmarks, a disappointment could leave some exposed. Full report to come within the hour....
Article / 23 June 2016 at 10:53 GMT

Markets on edge as UK makes once-in-a-generation decision

First in Business Worldwide. /

It's simple really — Yes or No. Photo: CNBC


Global markets are gearing up for a tense day of trading as the British public goes to the polls to vote on whether to remain in or leave the European Union with analysts pointing to "tough choices" for the UK, whatever the result.

Voting will take place between 7:00 a.m. and 10:00 p.m. London time – during which media reporting restrictions are in place – and after the votes have been counted and called in 382 local voting areas relating to 12 regions in the UK, an indication of the final result could emerge from 4:00 a.m. London time onwards.

European markets opened slightly higher on Thursday as voting got underway. Thursday is the culmination of four months of fraught campaigning by the leave and remain groups, who have been trying to win over the British public to their arguments over whether the UK would be better-off staying in the 28-country economic and political bloc or not.

The main points of division among the public are the costs of EU membership, the benefits of such membership to the economy, sovereignty and immigration with widely differing data used by campaigners on both sides.

Opinion polls have been close throughout the campaign and remain too close to call with a significant number of voters undecided up to the last-minute. Turnout is nevertheless expected to be high with around 46.5 million people eligible to vote, according to the Electoral Commission.
Markets were given a boost by the polls released on the eve of the vote by ComRes, conducted for the Daily Mail newspaper and ITV television, and YouGov for The Times newspaper in London, which showed a last-minute increase in the number of voters supporting the remain campaign.

The pound rose to a six-month high against the dollar following the polls, touching $1.4847. It was trading at $1.4793 at around 5.30 a.m. London time. It should be noted that two other polls, conducted by Opinium and TNS and also published on Wednesday, gave the leave vote a narrow lead.

Investors were more cautious in Asia, where stocks traded mixed on Thursday, following losses in US stocks and as markets remained on edge ahead of the UK vote. Several large banks have issued warnings over the possible ramifications of a Brexit vote with market volatility and a decline in sterling predicted should the majority of UK voters opt to leave the EU.

Asian markets were cautious overnight. Photo: iStock

Tough choices post vote

Whatever the outcome of the vote, analysts are pointing to difficult choices that still need to be made by the UK government and say that the future of Prime Minister David Cameron, who has led the remain campaign, remains in the balance.

If a Brexit result is announced, Cameron will at some time have to activate Article 50 of the 2009 Lisbon Treaty which sets in motion the process of leaving the EU which can take up to two years to complete. Once activated, there is seen as no easy way back for the UK (all other 27 EU nations would have to agree to allow the UK. to return).

Craig Erlam, senior market analysts at OANDA, said that the referendum was "arguably the biggest risk event of the year."

"With a number of polls suggesting the race is neck and neck, I would expect the markets to be quite volatile at times over the next 24 hours. Moves in the pound in particular could be quite wild once the voting closes this evening and the results start to be released from around 1am (UK) onwards," he said.

Most analysts retained their call for the UK to remain in the EU. Carsten Nickel, deputy director of research at Teneo Intelligence, said in a note on Wednesday that the risk advisory team retained its long-standing call unchanged: "The U.K. is marginally more likely to remain a member than to leave the EU (60/40%)."

Nickel noted that even if the UK votes to remain in the EU, "structural problems behind the populist surge are far from resolved" and said there was arguably no "positive outcome" from the vote.

"Any UK government would face tough choices post-Brexit: either fail to deliver on limiting immigration to secure full access to the single market, or risk limited trade-deals (which could take years to conclude) to regain full control over the UK's borders. In either case, a public backlash and continued populism are the risks," Nickel said.

"Even if the UK stays, structural problems behind the populist surge are far from resolved: Labour remains out of touch with middle-class voters; the majoritarian electoral system denies some 5 million UKIP voters representation; London appears ever more estranged – economically and culturally – from the rest of the country; inequality, immigration and the future of public services continue to cause concern among voters. The question of a regional devolution of powers, most notably to Scotland, add to these complications," he said.

CNBC is a recognised world leader in business news, providing real-time financial market coverage and business information to more than 340 million homes worldwide. Visit for more financial news and information.

— Edited by Martin O'Rourke
23 June
Jim Earls Jim Earls
Didn't they have a vote in 2011 on the matter, so how is this once in a generation? Seems like it is twice in a generation now.


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail