Brexit polls at odds with currency mkts

Bloomberg

Britain’s referendum on EU membership entered its final day of campaigning with opinion polls and financial markets at odds about the likely outcome.
Money has piled into bets on “Remain” winning over the past week. The pound has surged to a five-month high and an index of betting flows compiled by Oddschecker shows the chance of Brexit has fallen to 26 percent from 43 percent since June 14. Polls, meanwhile, say the race is too close to call after a swing towards the Leave campaign came to a halt last week.
“The way the pound is trading it looks like the vote is a foregone conclusion for ‘Remain,’” said Joseph Capurso, a senior currency strategist in Sydney at
Commonwealth Bank of Australia. “The polls are still too close to call in our view. If the vote is for exit, the pound is set up for a large fall.”
For now, both sides of the campaign are assuming there’s all to play for as Prime Minister David Cameron for “Remain” and Boris Johnson of the Leave campaign make emotional appeals to the British electorate.
With different polls putting each side ahead, the BBC screened a debate on Tuesday evening from Wembley Arena in London, where an audience of 6,000 cheered and jeered as advocates of leaving and remaining in the 28-nation bloc confronted each other.
The fieriest arguments were within the governing Conservative Party. Both Johnson and Energy Minister Andrea Leadsom, arguing for “Leave,” were confronted by the leader of the party in Scotland, Ruth Davidson.
“You are being asked to make a decision that is irreversible, we can’t change, we wake up on Friday and we don’t like it and we are being sold it on a lie,” Davidson said.
“They lied about the cost of Europe, they lied about Turkey’s entrance to Europe, they lied about the European army,” she told the audience. “You deserve the truth.”
Johnson urged the nation to make Thursday “our country’s independence day.”
“They say we can’t do it,” he said. “We say we can. They say we have no choice but to bow down to Brussels. We say they are woefully underestimating this country.”
The “Leave” campaign had one key message in the TV debate — “take back control” — and hammered it home repeatedly. “I’m passionately a believer in immigration, but it’s got to be controlled,” Johnson said.
The “Remain” side focused its fire on Johnson in particular. His successor as mayor, Labour’s Sadiq Khan, accused him of running “Project Hate” over immigration.
Khan, who was fasting for Ramadan and hadn’t eaten since before dawn, offered a passionate defense of international cooperation.
“I choose to work with the EU to fight climate change,” he said. “I choose to work with the EU to deal with the refugee crisis. I choose to work with the EU to fight terrorism and organized crime.”
The tension between the two sides was palpable earlier in the day when Cameron emerged from his Downing Street office to make a statement at short notice, urging the older generation to “think about the hopes and dreams of your children and grandchildren.”

‘Nobody Knows’
He said in an interview for Wednesday’s edition of the Financial Times that the race was “very close — nobody knows what’s going to happen.” He added that he’d start negotiations on EU exit terms “rapidly” in the event of a “Leave” vote.
The “Remain” campaign emphasized its message of the economic risks of a Brexit, with Wednesday’s Times newspaper publishing a letter from 1,285 leaders of businesses employing 1.75 million people, saying that “Britain leaving the EU would mean uncertainty for our firms, less trade with Europe and fewer jobs.”
Among the signatories was Michael Bloomberg, founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.
Pound Strengthens
Global stocks have rallied over the last three days as the vote nears. Asian equities outside of Japan on Wednesday eked out a fourth day of gains as the pound strengthened. The currency appreciated 0.2 percent to $1.4687, after reaching a five-month high of $1.4783 on Tuesday. It’s jumped 3.4 percent over the past five sessions.
In other campaign news:
Burnbrae Group Chairman Jim Mellon, a “Leave” backer, said the pound may fall 10 percent in the event of a Brexit. Federal Reserve Chair Janet Yellen warned against exaggerating the global impact of a “Leave” vote. The Daily Beast reported that Queen Elizabeth II asks dinner guests to give three good reasons why the U.K. should stay in the EU on Wednesday.