Yesterday saw a dramatic resurgence in the value of the Pound as it rose to its biggest daily gain in 8 years. This was a result of a marked change in sentiment around the referendum, over the weekend, when three opinion polls showed the Remain camp had regained momentum. This shift was reflected in bookmakers odds with the chance of a Brexit being reduced to 25%. Stock markets also enjoyed a 'Bremain’ bounce with the FTSE 100 soaring 182.91 points, or 3.04pc to 6,204, its biggest daily rise since mid-February. The change in sentiment has wiped £66bn back onto the blue chip index since Thursday.
The feel good factor crossed the channel as European bourses posted their best rally in 10-months. Germany’s DAX figure rose to 3.4pc and France’s CAC jumped reading to 3.5pc whilst the Euro appreciated nearly 2% against the Dollar since Thursday evening.
Aside from the EU Referendum, economic data was particularly light as the week began with only lower tier data. According to Rightmove, house prices in the UK have recovered from last month’s concerns as the House Price Index climbed to 0.8%, strongly up from last month’s 0.4% slump. The German Producer Price Index registered at 0.4% as expected, up on last month’s 0.1% reading.
With only 48 hours before polling stations open, the focus will remain on the Referendum. Additionally, there will be a ruling on the ECB’s use of more aggressive and expansive monetary policy tools as the German Federal Constitutional Court is due to announce a ruling on the constitutionality of the ECB's Outright Monetary Transactions (OMT). Also Germany will release their ZEW Economic Sentiment figure which is expected to disappoint, dropping to 5.1 from 6.4. Later in the day, ECB President, Mario Draghi and Federal Reserve Chair, Janet Yellen will both testify in front of the European Parliament's Economic and Monetary Affairs Committee and the Senate Banking Committee.