UK exit risk has risen sharply in the last two days – RBC CM

Adam Cole, Research Analyst at RBC Capital Markets, suggests that the implied UK exit risk has risen sharply in the last two days (27% today from 17% last Thursday, according to the bookmakers’ odds), but we still think it is too low given that opinion polls are showing no real change in voting intentions.

Key Quotes

“We continue to prefer tactical shorts in GBP. Our trade of the week this week is short GBP/SEK. UK data will continue to be scrutinised for evidence that referendum-related uncertainty is constraining activity and this is particularly true of survey based-data like today’s manufacturing PMI.”