GBP: Still room for a squeeze of short positioning as voting begins – BNPP

Research Team at BNP Paribas, suggests that the GBPUSD heads into the EU referendum at close to its high of the year and with its ‘risk-premium’ according to BNP Paribas CLEER™ (our macro based fair-value model) being close to its lowest this year.

Key Quotes

“The most recent polls heading into the vote confirm the shift in favour of remaining within the EU, but the numbers remain close with the FT poll of polls showing a  44% leave to 43% stay split heading into the voting. Our BNP Paribas Positioning Analysis suggest the market has reduced GBP shorts heading into the voting but remains substantially short, suggesting scope for a further relief rally in the GBP in the event a “remain” vote is confirmed.

There are no official exit polls but the details of private polls may be released after voting has closed.  Official results are likely to be publish from after midnight. Risk sensitive currencies are also extending their gains of the week, helped by a consistently dovish message from Fed Chair Yellen in her House testimony.

On the data front in Europe on Thursday, focus will be on flash PMI reports in Europe as well as manufacturing sentiment data in France and Belgium ahead of the German IFO on Friday. The Norges Bank also has a policy announcement this morning.”