Pound and shares jump as investors await referendum result – as it happened

Graeme Wearden (until 2pm) and Angela Monaghan

from on 2016-06-23 15:55 (#1J3GR)

Markets around the globe are anxiously waiting to learn if Britain votes to leave the European Union

5.24pm BST

So the FTSE has closed up at the highest level since 21 April, at 6,338.1.

The pound hit a six-month high against the dollar, rising above $1. 48 for the first time in 2016.

4.55pm BST

The FTSE 100 has staged a late rally as trading comes to a close for the day.

Earlier in the day it was up by more than 100 points, but the majority of the gains were lost as investor nerves picked up - leaving the FTSE up just 18 points at one point.

4.30pm BST

Andy Scott, economist at HiFX, has a good take on the pound:

After clocking up an impressive rally of nearly 2% on Thursday - hitting a 6-month high against the US dollar as the polls showed a late swing to a Remain vote - sterling reversed course sharply this afternoon.

GBP/USD fell 200 points from its high to $1.4750 as traders took profits on the earlier rally, positioning themselves cautiously ahead of a still uncertain outcome.

4.13pm BST

The pound is up 0.5% against the dollar at $1.4777.

It's up 0.07% against the euro at a1.3024.

4.10pm BST

Latest on the markets:

Europe:

3.57pm BST

Brits have been rushing to buy their holiday money according to No.1 Currency.

Demand has rocketed for all foreign currencies, but euros and dollars are proving especially popular.

Our stores came close to running out of the most popular currencies on Wednesday, and as high demand continues today we've dramatically increased stock levels to cope with the surge in demand during the final hours before the result is announced.

3.38pm BST

So it appears that investors are feeling a little less bold this afternoon, with referendum jitters creeping back in.

Connor Campbell of Spredex has a view:

Things have calmed down somewhat since that midday frenzy, the European indices looking increasing nervy as closing time creeps closer.

The indices receded from their midday peaks, instead returning to the calmer trading seen earlier in the morning.

3.19pm BST

UK investors are losing some enthusiasm now.

The FTSE 100 is up 18 points or 0.3% at 6,278 - smaller gains than we saw earlier in the day when the FTSE was up more than 100 points at 6,371 at one point.

3.05pm BST

More positive news on the US economy... this time from the manufacturing sector.

The headline index on Markit's "flash" manufacturing PMI survey rose to a three-month of high of 51.4 in June, from 50.7 in May (where anything above 50 indicates expansion). Growth in exports was the main driver of growth.

The flash PMI for June brought welcome news of improved performance of manufacturing, but the sector still looks to have acted as a drag on the economy in the second quarter, leaving the economy reliant on the service sector and consumers in particular to drive growth.

Any improvement could be largely traced to better export sales, in turn linked to the weakening of the dollar compared to earlier in the year. Domestic demand was again worryingly weak, especially from business customers, meaning overall growth of order books remained subdued.

2.39pm BST

US markets are up in early trading, echoing the upbeat sentiment in Europe.

2.35pm BST

Away from the markets, US jobless claims fell more sharply than expected last week according to figures from the Labor Department.

The number of new claims for unemployment benefits fell to 259,000 in the week ending 18 June, from 277,000 a week earlier. It was the biggest drop since February and close to a 43-year low touched in March.

US #jobless claims fall to a near 43-year lowhttps://t.co/1xMol7sF8W

2.06pm BST

Wall Street is expected to open higher:

US Opening Calls:#DOW 17928 +0.83%#SPX 2102 +0.84%#NASDAQ 4441 +0.84%#IGOpeningCall

1.44pm BST

On a lighter note, a horse named Brexit is taking to the turf at the Newbury racecourse tonight, at 6.10pm.

But it's unlikely to triumph, with Betfair offering 12-1 odds on Brexit galloping home first.

1.20pm BST

I mentioned earlier that the cost of insuring against the pound either plunging or soaring overnight had soared.

That's still true. But, the cost of insuring against wild swings over the next week has fallen. That suggests investors are less worried about a sterling crisis kicking off tomorrow.

#Brexit risk collapses... pic.twitter.com/wYopZ3e4u1

1.10pm BST

Amid today's rally, some analysts are urging traders not to get carried away. Not a single vote has been counted yet.

Peter Rosenstreich, head of market strategy Swissquote Bank, says investors need to trade very carefully, and keep an eye on the North East city of Sunderland...

One of the earlier constituencies to declare a result should be Sunderland, viewed as a Brexit bellwether. Should Sunderland result in a close result or an outright majority vote to "remain", then it is assumed that a "remain" vote will triumph.

By 05:00am BST, 80% of authorities are expected to have made their respective declarations, providing a clearer view of the outcome.

12.50pm BST

Foreign exchange group UKForex has seen a 100% increase in consumers making transfers from the pound into other currencies, in the last 24 hours.

The majority are transferring from sterling to euros.

"If the UK opts to leave, the pound could fall as much as 20%. Consumers could lose up to 1,398 on a 10,000 transfer, compared to today's rate."

12.38pm BST

David Cheetham of City firm XTB.com says the financial markets appear to have discounted the chance of Brexit over the last few days:

The price movements so far this week in financial markets suggest that a victory in today's EU referendum for the leave camp has been given a very low probability, with the pound touching its highest level of the year against the US dollar this morning whilst the surge in the FTSE of late continues almost unabated.

Rather than heeding caution and remaining on the sidelines until this potentially major event risk has passed, traders appear to be betting on remain prevailing and are positioning accordingly.

12.30pm BST

Even the oil price is up this morning, as investors show more confidence about the global economy.

Brent crude is up 1.7%, back over $50 per barrel at $50.71.

Financial markets are playing Ode to Joy. Sterling up, FTSE up, oil up, "remain" up in final #EUref polls

12.16pm BST

Here's our latest news story on today's market moves, by Katie Allen:

12.14pm BST

Pound not showing much response to noon Populus poll showing big remain lead. Looks like already priced in #EUref : pic.twitter.com/eiAYpg62zx

12.09pm BST

Another opinion poll just flashed up, also giving Remain the majority of support.

Populous reports that 55% of people surveyed want to stay in the EU, while 45% want to leave.

The final polling charthttps://t.co/EwJGsAhrDK pic.twitter.com/JHrzclug0Q

11.41am BST

The City isn't waiting for the EU referendum result before piling into the pound.

Sterling just shy of $1.495 after Ipsos (4pt lead to remain) - Populus poll at 12. Could it hit $1.50 today? pic.twitter.com/gqoOuRZZhH

11.35am BST

Over at City firm ETX Capital, traders are getting ready for a referendum all-nighter.

Joe Rundle, head of trading, says:

"Whatever the result, it's going to be a sleepless night for our traders as the results come in slowly on Friday morning. We'll be fully staffed overnight to cope with the increased trading and volatility.

It's an incredible opportunity for traders to make big bets on the fortunes of the pound and other markets affected by the referendum such as the FTSE.

11.27am BST

Wowzers, the pound has now broken through $1.49 for the first time since the end of last December. That's a gain of two whole cents today.

11.14am BST

Breaking: Ipsos MORI, the polling company, has just released its final opinion poll on the referendum.

And it shows that 52% of those surveyed wanted to stay in the European Union, against 48% who favour Leaving.

here it is 52% REmain and public expect Remain win pic.twitter.com/aF3hmmI17q

GBPUSD surging again on the Ipsos Mori poll pic.twitter.com/B6dspFlTOf

The four-point gap is nail-bitingly close - especially with heavy rain threatening to dampen turnout in London which is a key target area for Remain.

Moreover, the research discloses that 12 per cent of people confess they might change their minds in the few hours left before they cast their vote, indicating how the historic decision has torn the country.

EXCLUSIVE: Remain secure narrow lead in final EU referendum poll https://t.co/1LxzpEWTwL pic.twitter.com/6QYKIrUayq

11.05am BST

The higher shares rise today, the more they could fall tomorrow if Leave win.

FXTM research analyst Lukman Otunuga says:

With the EU referendum polling commencing on Thursday, market volatility may be set to amplify to untold levels as speculation heightens over the United Kingdom's future in the European Union.

Although stock markets were offered a lifeline this week amid the "Bremain" optimism, most major stocks could be poised to decline lower if risk aversion and a potential "Brexit" encourages investors to scatter away from riskier assets.

10.58am BST

Jeremy Cook of currency trading firm World First flags up that currency trading is pretty light today.

Many traders are keeping to the sidelines until the EU referendum result is known, to avoid being squashed by a fast-moving market.

Sterling liquidity thinner than a slim bag of spaghetti in a hall of mirrors

10.31am BST

The pound is on a real tear this morning....

Sterrrrrlinnnnnng pic.twitter.com/HuWbPWYrzx

10.24am BST

Britain's blue-chip FTSE 100 index has just hit its highest level in two month, as traders continue to watch today's EU referendum unfold.

The Footsie jumped by 110 points to 6371 points, a gain of 1.5%. That's its highest level since 21 April, before the EU referendum campaign came to the boil.

For all the posturing and emotive discussions that have taken place across homes, workplaces, TV studios and social media, the time has come for talk to turn into actions.

Amid restrictions to broadcasters, there is an eerie feeling in the city, with a nervous energy evident as we await the fate of the nation. Whatever the result, volatility is likely to be the name of the game.

10.08am BST

The latest eurozone economic data is in, and it's not terribly good news.

Markit's latest Purchasing Manager Index reports, which track activity across Europe, have come in weaker than expected.

"A renewed fall in new business was behind the decline, with respondents highlighting the difficulty of securing work amid a fragile demand environment.

"A flagging manufacturing sector was again the main source of weakness."

9.55am BST

After hitting its highest level of 2016 against the US dollar in early trading, the pound is now calmly bobbing around $1.477:

9.23am BST

Referendum day is always good for photos, to fill the time before the results come in.

9.13am BST

Sterling is also a little higher against the euro this morning, at a1.3050 (up from a1.3015 overnight).

9.11am BST

Although the pound has risen today, we should note that trading is pretty thin.

And traders will be trading blind until after 10pm tonight, when the polls close and we get an on-the-day poll from YouGov.

"If polls after the vote closes suggests that "Leave" is in front, then we could see sterling drop. These are very challenging conditions."

"Although most recent polls swayed toward the remain camp in the last couple of days, the lead is still very narrow, which doesn't explain the surge in pound.

However, the markets are being completely reliant on the predictions from the bookies, which strongly expect "remain" to win the referendum."

9.07am BST

A little light music to guide you through the day....

The Brexit Referendum. As explained by the Smiths. https://t.co/Miid7GbRoK Your 6 song playlist for today.

8.56am BST

European stock markets are mostly higher this morning, although there are no big moves.

8.45am BST

There's been a massive jump in the cost of insuring against sharp swings in the pound overnight.

"Sterling overnight implied volatility" - which basically measures the cost of hedging the pound - surged to levels not seen in many years (my data only goes back to 2008).

8.33am BST

The pound has dipped back a little, as the rain pours down City trading floor windows.

It's still up around 0.5% today, though, at $1.4763.

Sterling off a *bit*. I blame the rain.

8.08am BST

And we're off ... trading has opened in London and the FTSE 100 is up just over 40 points, or 0.7%, at 6305 points.

Tesco is highest FTSE 100 riser, up 2%, after better-than-expected sales growth of 0.3% for its core UK supermarkets chain. This is the first time in more than five years that Britain's biggest retailer has managed to produce two consecutive quarters of sales growth. It has also announced the sale of its Harris + Hoole coffee chain.

7.43am BST

City traders may actually struggle to get to their desks on time, given the torrential rain and flooding problems in London and the South East.

Let's hope they have understanding bosses.

Abellio Greater Anglia, South West Trains and Southern all warning of major delays on certain routes because of the flooding.

It's not raining as hard as it was an hour ago, at least. Still a cop armed with a mop inside. pic.twitter.com/LHIC6YLLYL

Next problem: getting to work pic.twitter.com/sMKwopv2hb

7.41am BST

Japan's stock market had a decent enough day, closing more than one percent higher in the last session before Britain's referendum.

Markets in risk-on mode as smart money bets on Bremain. #Japan's Nikkei jumps 1.1% to 16238.35 but Yen unchg. pic.twitter.com/0UYp3kw81u

7.39am BST

Britain's financial institutions have taken some pretty serious steps to protect themselves against volatile markets over the next few days.

Our city editor Jill Treanor explains how investors will be setting up 'war rooms', ready to act as the referendum results start to come in....

Major banks are preparing for two days of unprecedented uncertainty by stuffing cash machines full of money, placing senior bankers on high alert in emergency war rooms around the City and switching off computer-driven "black box" trading systems to avoid incurring huge losses in violent swings in shares, bonds and currency markets.

With uncertainty about the precise moment the outcome of the EU referendumwill be known, dealing rooms are opening across the City on Thursday night and into Friday morning to allow trades to be executed for customers needing to respond to the results of the 382 polling areas as they start to be announced.

7.35am BST

Here's a handy chart from the FT, showing how the pound has picked up:

Sterling edges back as UK polls open https://t.co/WWlyi8FdyO

7.30am BST

Here's our latest news story about the referendum:

7.27am BST

Sterling has hit its highest level against the US dollar this year, as traders in Asia watched events in the UK.

The pound hit $1.4844 against the US dollar for the first time in 2016, and is currently hovering around $1.48 in early London trading.

A decision to leave the EU is bad for global risk sentiment, good for the yen, and bad for sterling, the Euro and higher-beta currencies particularly central and Eastern European ones.

On a 'Leave' decision, we expect the pound to fall to $1.30-$1.35 quickly and we look for an eventual fall to $1.20-$1.25

7.05am BST

Good morning.

And also of note for #EUref, the weather is pretty awful so far today! Analysts have suggested this favours the Leave camp

Source	RSS or Atom Feed
Feed Location	http://feeds.theguardian.com/theguardian/business/economics/rss
Feed Title
Feed Link	http://feeds.theguardian.com/