Pound jumps most in 2 weeks as ‘Remain’ vote rises in Brexit poll

Bloomberg

The pound rallied the most in two weeks after a poll of U.K. voters released on Monday showed people who support a campaign to remain in the European Union exceeded those saying they will vote to leave by a wider margin than last month.
Sterling rose against most of its 16 major peers after the ORB/Telegraph poll showed 55 percent of respondents were in favor of remaining in the European Union, while 40 percent wanted to leave. The proportion in the remain camp increased from a similar survey in April. Britons will vote on the country’s EU membership on June 23. U.K. government bonds declined even as a report showed inflation slowed.
“The pound is finding buyers as polls seem to indicate the Remain vote is gaining the advantage over Leave,” said Peter Rosenstreich, head of market strategy at Swissquote Bank SA. “We are still cautious ahead of the vote. Unless the polls really show a decisive Stay lead, rallies in sterling can be seen as an opportunity to sell.”
The pound rose 0.4 percent to $1.4461 as of 10:08 a.m. in London, the biggest jump since May 2. That pared its loss against the greenback this month to 1 percent. Sterling appreciated 0.4 percent to 78.30 pence per euro.

Consumer Prices
The U.K. currency stayed higher even after a report showed the annual pace of U.K. inflation unexpectedly declined in April. The rate fell to 0.3 percent from 0.5 percent in March, driven lower by the cost of air fares and clothes, the Office for National Statistics said in London on Tuesday.
Gilts fell as stocks climbed, damping demand for haven assets such as government debt.
The yield on 10-year gilts rose one basis point, or 0.01 percentage point, to 1.41 percent. The 2 percent security due in September 2025 fell 0.115, or 1.15 pounds per 1,000-pound face amount, to 105.15.
Rising stock prices have helped “boosted risk appetite, weighing down on core government bonds including gilts,” said Nick Stamenkovic, a bond strategist at RIA Capital Markets Ltd. in Edinburgh.
Gilts have earned investors 5.7 percent this year, compared with a 3.9 percent in German sovereign bonds, according to Bloomberg World Bond
Indexes.