Well, nothing too much has changed materially, but just a hint of growing momentum that the UK might STAY in the European Union has coincided with a fairly wild Surge in Pound Sterling which has resulted In big gains for global equities, with European indices mostly higher by more than 3% today. S&P futures have followed suit to Europe, with early gains last night in S&P futures OVER 2074 causing Buy programs to get triggered technically , stopping out shorts while prices rose another 12 points higher up to 2086.
The Pound strengthened the most since 2008, while STOXXEurope 600 is showing its largest gains since last August. Treasuries meanwhile have fallen off, with German bund yields UP to +.04 bps fairly quickly from -.03 bps last week and Treasury yields in the US higher to 1.67, up fairly dramatically from 1.53
Technically, the act of getting OVER 2074 in Futures is a real positive technically, (SPX should be back over 2085 after the open) just a time when Volatility had begun to show evidence of fear rising rapidly last week on the uncertainty. Both Japanese Yen and Gold are DOWN, as might be expected with any signs of fear abating. While the near-term technical picture as of last Friday had Begun to show some evidence of stabilization, there really wasn't much to point to on a short-term basis to rule out one final pullback ahead of BREXIT, and this move is certain to catch many off guard. Bottom line, it goes without saying that the picture at this point has turned more positive on the ability of S&P, and European indices to get back OVER key areas last night and this morning. The indecision of near-term stabilization leading UP or DOWN looks to have been resolved, despite much material news. Any BREXIT at this point would in turn likely reverse this move quickly, and lead to a sharp Dollar rally. Charts below
Continued dropoff in BREXIT chances, as shown by Oddsmaker polls in the UK, with oddshaving dropped down thus far to 28%, down from 45% just over a week ago
Last night's gap open in the S&P following Pound Sterling gains & European equity surge set off a chain reaction around the globe, despite little or no News to suggest anything was set in stone before this week's vote. However, most will seek to chase this move, not wanting to be caught offguard, and try to position for a positive outcome given the uncertainty and the fact that AFTER this week, a lot LESS uncertainty will exist in the marketplace
S&P surge has reclaimed 2074, which will equate to near 2085 in SPX cash, a definite short-term positive technically
Here's the surge in Pound Sterling that set off the chain reaction, which began from lows last Thursday and led to Yields following suit Friday HIGHER, which has now followed through even more.
A definite positive to have European indices back OVER former lows, which tilts the odds towards more gains ahead of this vote. SXXP the STOXX Europe 600 index shown here
Signs of uncertainty coming to a close late this week have resulted in bond yields continuing UP, which began late last week on Friday and has followed through- While there weren't sufficient signs to argue for a meaningful lift, this rise is important and should face its own important resistance now near 1.70, which is a significant barrier and would be even more important if surpassed.