Brexit polls
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • LinkedIn
When it comes to politics, markets are as fickle as they can be. Closing in on the Brexit vote this Thursday, every half a point that either camp gains or loses on a poll, sends the markets through a roller coaster ride. Monday was only different from the past few weeks insofar as the tendency is concerned. Markets responded to polls showing that the anti-Brexit camp has gained some ground, by rallying and erasing most of the losses they accumulated last week. The volatility however is still there, and with the ensuing frailty of the world’s economic recovery, this could be a set up for another plunge.

Assets, whether they were major stocks exposed to Brexit fears or commodities, closed up. Oil gained close to 2.5%, while the Dow Jones industrial average climbed by almost ¾ of a percent. Gold had a minor retreat of almost a quarter of a basis point, which is expected when an important interest bearing currency such as the British pound, closes the day with gains. The GBP:USD pair closed above the $1.46 mark, reflecting the market’s reaction to the latest poll figures.

However, investors must remain vigilant. Opinions change all the time, and numerous election results around the world have shown that polls can be beaten. The risk of Brexit has not changed significantly since last week, and if the Fed and other central banks and multi-billion dollar businesses remain cautious, so should every other investor. After all, roller coaster rides are characterized by steep climbs as soon as they start. Those who ride them, know that the tipping point is coming, and once it does, the only thing left to do is to endure the drop. Brexit is no different, and like any roller coaster ride, the steeper it climbs, the more speed it will gather when it crosses that tipping point and begins to fall.

Pin It on Pinterest