Ballots from the City of Westminster and City of London are counted at the Lindley Hall, Royal Horticultural Halls, in London, Britain, 23 June 2016. Counting gets underway in the referendum on the UK's membership of the European Union.
Ballots from the City of Westminster and City of London are counted at the Lindley Hall, Royal Horticultural Halls, in London, Britain, 23 June 2016. Counting gets underway in the referendum on the UK's membership of the European Union. EPA - ANTHONY DEVLIN

Markets and betting give strong indication of Brexit winner

Global Sentiment:

Voting in the UK "Brexit' referendum closed at 7.00am (AEST) this morning with the official result to be announced around 4.00pm (AEST) this afternoon.

Exit polls have not been commissioned by the major political parties.

The first counts are expected by 9.30am (AEST) with 80% counted by 2.00pm (AEST).

Risk-on trades around the globe suggest that markets expect the 'Remain' vote to prevail. The latest odds with bookmakers gave the 'Leave' camp only a 15-20% change of winning.

Share Markets:

Expectations of a 'Remain' win in the UK 'Brexit' referendum saw share markets achieve solid gains.

In the US, the Dow and the S&P500 rose 1.3% and the Nasdaq was up 1.6%. In Europe, the FTSE100 rose 1.2%, the French CAC40 was up 2.0%, the Dax rose 1.9% and the Eurostoxx was up 2.0%.

Interest Rates:

As positive sentiment gained momentum, the appetite for safe-haven assets such as government bonds declined.

Yields rose in the US, Germany and the UK. In the US, 10 year government bond yields rose 6 basis points to 1.75%. Adding to positive sentiment in the US were some good signals on economic activity (see below).

Foreign Exchange:

The UK pound rose above $US1.50 for the first time since December on firming expectations of a 'Remain' win in the UK referendum.

The AUD weakened against the UK pound, falling from 51.4 UK pence to 50.9 UK pence at the time of writing.

The US dollar index was a touch weaker overnight and the AUD moved into the US 76 range as risk appetite rose.

Commodities:

Oil benefited from the 'risk-on' sentiment with West Texas Light crude up 1.7% to $US49.20 per barrel.

Gold was marginally weaker while copper also rose 1.7%. Iron ore was down 0.8% to $US51.89 per tonne.

Australia:

No major economic date was released yesterday.

United States:

The number of Americans filing for unemployment benefits fell last week to near a 43-year low, suggesting labour market resilience even though hiring slowed sharply in May.

US jobless claims were 259k for the latest survey week against an expectation of 270k.

Other data on Thursday also gave a fairly upbeat assessment of the economy after it stumbled in the first quarter.

Manufacturing activity rose more strongly than expected to a three-month high in early June with the manufacturing PMI coming in at 51.4.

New home sales disappointed with a 6.0% fall in May; however, the decline was from an eight-year high in April and the trend remained consistent with a firming housing market.


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