Coverage: Poll indicates Britain to remain in EU

Polls released showed that a majority of British residents plan to vote in favor of remaining in the European Union, sending markets higher.

Riva Gold and Mike Bird of The Wall Street Journal had the news:

Two weekend polls showed—by tiny margins—that British voters now favor remaining in the union, versus a departure, or Brexit. Afterward, the British pound leapt more than 2% against the dollar to $1.47, among its strongest performances in years. The Stoxx Europe 600 jumped 3.6%, its best day since August. Japanese shares rose 2.3%, their steepest climb since April. In the U.S., the Dow Jones Industrial Average—which at one point was up 271 points—ended up 129.71 points, or 0.7%, while the S&P 500 added 12.03, or 0.6%.

“This rally has just underlined how very nervous markets are,” said Morten Helt, an analyst at Danske Bank. “You could easily imagine a poll tomorrow showing a majority for the Leave camp, with another volatile reaction in the opposite direction.”

Several more surveys are expected to be released before Thursday’s vote. Polls released late Monday night were mixed, with an online survey conducted by YouGov giving a lead of two points to Leave, at 44% to 42% for Remain. The pro-EU camp held a two-point lead in a phone poll from ORB International, at 49%.

Luzi-Ann Javier and Eddie Van Der Walt of Bloomberg News examined how commodity markets reacted:

Gold futures for August delivery slipped 0.2 percent to settle at $1,292.10 an ounce at 1:45 p.m. on the Comex in New York. Copper futures for July delivery rallied 2 percent to $2.093 an ounce on the Comex.

A gauge of 18 global base-metal producers tracked by Bloomberg Intelligence rallied 3.6 percent, led by Anglo American Plc and Freeport-McMoRan Inc.

In the run-up to the vote, investors added to holdings in gold-backed exchange-traded funds. As of Friday, the assets in ETFs rose 0.4 percent to 1,895.1 metric tons, the highest since October 2013.

At the same time, hedge funds are holding the second-biggest bet ever that the metal will rally further. In the week ended June 14, money managers boosted their net-long positions in gold futures and options 29 percent to 240,862 contracts, according to U.S. Commodity Futures Trading Commission data.

Dan McCrum and Peter Wells of the Financial Times noted how the British currency reacted:

Sterling is the most visible measure of global investor attitudes towards the referendum, and the rally — which saw the UK currency trade above $1.47 for the first time since May, a rise of more than 2 per cent — came amid increasing confidence within the Remain campaign that momentum had shifted back in its favour.

Mike Amey, a portfolio manager for Pimco, said “the market has definitely gone from, at the most extreme, a 50/50 chance of Brexit back to a market implied possibility of around 75/25 for Remain”.

Sterling has swung wildly in recent days, and measures of volatility have spiked to levels last seen in the 2008 global financial crisis. The sharp increase on Monday underscored the potential for further market upheaval if the vote ultimately goes for Leave.

In Tuesday’s Guardian, financier George Soros, who bet against the pound when Britain crashed out of the EU exchange rate mechanism on “Black Wednesday” in 1992, warned: “A vote to leave could see the week end with a Black Friday.”