EU polls control the market

With very little data out yesterday the markets continued to act on sentiment and attention being firmly on the situation in the UK with the EU referendum looming closer with only a couple of weekends to go until the result will be made public. An EU poll from Yougov showed a 1% lead for the stay campaign but this recent poll suggests that the vote is much closer than expect and the outcome seems to be more up in the air than once thought. It is worth pointing out that Sterling is still in a better position now by over 5 cent’s than we were when the referendum was made public as we saw rates plummet below 1.23 at the beginning of the year however, should the Brexit campaign gain more support and the UK leave the European union we could see drastic market movement and likely be trading below the 1.20 mark. Also supporting a possible downfall to the Pound could come from the Eurozones current recovery, the previous increase of the Quantitative easing programme seems to be having a positive effect on the Eurzones economy and is recovering faster than initially forecasted, Gross domestic product for example was expected to come in at annually 1.5% but in fact recorded a better figure of 1.7%. Not great news for GBP/EUR buyers in the long term should we leave the EU and the Euro continue on their fight for revival. The Fed have also seemingly back tracked on their plans to further increase interest rates this year and may even have to cut back from their interest rate hike back in December last year.

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