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Polling Day for the UK

Polling Day for the UK

Yesterday saw minimal Sterling volumes traded just one day before the EU referendum. The market continued to price in a vote to remain despite two key polls showing a slight lead for the ‘leave’ camp. This meant GBPUSD steadied around 1.4700 and GBPEUR maintained above 1.3000 throughout the day.

There is no key economic data due for release today and there’s also a blanket ban on the media reporting anything but factual information relating to the referendum. The market opens this morning with Cable above 1.4750 and GBPEUR just above 1.3000. Results of the referendum aren’t officially due until 7am tomorrow, however experts are predicting that we will know the results in the early hours of tomorrow. As a result, we will open at 6am tomorrow morning.

Market sentiment drove the price of the Euro yesterday. The single currency managed to make gains against the Dollar, however EURUSD failed to maintain above 1.1300. This morning, Manufacturing and Services Flash PMI data is due for release from the Euro area. It is unclear how much impact this will have on the market, however, as focus will most likely be on the UK’s referendum. There will inevitably be high Euro volatility following the UK vote, especially given the impact on risk conditions.

In the US, existing home sales rose to a nine year high, suggesting that the economy remains on solid footing despite a sharp slowdown in job growth last month. Existing home sales increased by 1.8% to an annual rate of 5.53 million units last month, the highest level since February 2007. Federal Reserve Chair Janet Yellen’s testimony did not change much from Tuesday, stating that interest rates would increase gradually if there was further improvement in the economy.

Data to watch: 8 am EUR French Flash Services & Manufacturing PMI mom. 8:30 am EUR German Flash Services & Manufacturing PMI mom. 9 am EUR Euro Area Flash Services & Manufacturing PMI mom. 1:30 pm USD US Unemployment Claims. 2:45 pm USD US Flash Manufacturing PMI mom. 3 pm USD US Home Sales. 10 pm UK EU Referendum Poll Closes.

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