Article / 23 June 2016 at 7:01 GMT

Morning Markets: And they're off!


  • chart

  • Britain votes: 0600 GMT to 2100 GMT  
  • Eurozone: Manufacturing & Services PMIs (0800 GMT) 
  • US: Chicago Fed National Activity Index (1230 GMT) 
  • US: Manufacturing PMI (1345 GMT) 

After weeks of rancorous and hyperbole-littered campaigning, some 46.5 million Britons go to the polls today to vote their way into the history books and perhaps, to vote their country out of the European Union. Two new opinion polls overnight seem to have given a slight edge to the Remain lobby, but this race is really far too close to call. The decision still rests on knife's edge.

And while the British decide, the only thing the rest of us can do is watch on and keep hoping that this will pan out the way that we want it to. We'll know the results soon enough: The first partial results from small constituencies should arrive shortly after midnight tonight and the full final result at "around breakfast time" on Friday, according to the UK’s Electoral Commission. However, a big chunk of the country's 382 local counting stations are scheduled to declare between 0200 GMT and 0300 GMT so we may have a clear idea of which way the axe will fall around that time.

Overnight, investors in Tokyo and Sydney either shrugged off the Brexit vote jitters, or laid bets on a Bremain outcome. Whatever motivation was in play, both the Nikkei 225 and S&P/ASX200 gained ground. Meanwhile, the appeal of higher interest rates has given both the Australian and New Zealand dollars a lift, no doubt bringing deep frustration to central bankers in both nations. But the real FX star in Asian trade was sterling which gained as much as 0.9% to a 2016 high of 1.4844 against the dollar before settling back to 1.4757 at 0640 GMT. The next 24 hours may see it rock far, far more.

Market signals

Asian session

  • UK-vote uncertainty weighed on sentiment in Asia, with many expecting a stay result
  • The Nikkei 225 headed higher and at 0500 GMT it was up 0.73% to 16,184
  • At the same time, the Shanghai Composite was down 0.83% to 2882
  • Japan's flash manufacturing PMI contracted for the fourth straight month to 47.8
  • The S&P/ASX200 made modest gains after a wobbly start; it was up 0.2% at 0500 GMT

Forex ahead

  • The US dollar edged higher against the yen: it was worth ¥104.7450 at 0047 GMT
  • The appeal of higher interest rates lifted currencies Down Under
  • The Australian dollar soared above 0.75; it was worth 0.7519 at 0047 GMT
  • The NZ dollar hit its highest level since June 2015; it was worth 0.7168 at 0102 GMT
  • Banks and FX traders are getting ready for any Brexit or Bremain impact

From the Floor

Watch out. “It will be very difficult in a Brexit scenario because of the high degree of volatility” says Hardy

Taking a punt. “Gold is the exception as the Vote Leave risk premium has been priced out”, says Hansen.

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

It's a busy day for economic news despite the Brexit vote distraction. In particular, James Picerno writes, June's US Manufacturing PMI is on track to show sluggish but firmer output.

Golden result
Today's UK vote will see the unusually quiet gold market swing back into action; a pro-Brexit result could trigger fresh highs above $1,300/oz, says the team at Saxo APAC sales trading.

It's showtime
Voting starts today in the UK referendum with bookies firmly in the remain camp. One thing is for sure, the risk is to the downside, explains Kay Van-Petersen.

 Brexit or Bremain? Banks and FX traders in Hong Kong, above, and around the world are getting ready in case sterling takes a pounding after the UK votes. Photo: iStock

Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
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