Risk aversion that dominated the Asian session on Monday reversed, albeit briefly, around the US equities open. However, following the latest ICM polls that showed an increase in lead for the Leave campaign, sentiments weakened again – GBP resumed the downtrend, while US equities and treasury yields were also lower.
Liquidity condition degraded from last week. This resulted in whippy price actions especially in GBP, exacerbated by a number of twitter rumors on the ICM poll outcome that consequently proved to be misleading.
The phone poll shows a raw 5% lead for Leave, with 45% for Remain (42% prior) and 50% for Leave (45% prior). The Brexit lead has expanded by two points from the previous phone poll on May 31. Also note the "Don't Knows" have fallen from 13% of the vote to just 5%. FWIW, the last YouGov poll was 43/42 leave, latest is 46/39. Risks for a Brexit are rising.
The online poll shows a raw 5% lead for Leave, same as the previous week (June 6). The breakdown is Remain at 44% (43% prior) and Leave at 49% (48%).
Major newswire initially reported the result as a six-point lead for Bremain, which corresponds to the GBPUSD spike to 1.4328.
However, this was actually a misreport and was quickly corrected to a six-point lead for Brexit, excluding the undecided. Cable came off accordingly, now around 1.4214.