Initial Guidance | 14 June 2016

Brexit worries sent the German 10-year bond yield into sub-zero terrain. “The market has adjusted to the head-to-head Brexit race and is pricing in maximum uncertainty,” ABN Amro’s chief investment officer Didier Duret tells Reuters.

The uncertainty linked to next week’s vote on UK membership in the European Union is weighing on equity markets too. “We don’t know what is happening with Brexit,” says Gareth Nicholson, an investment manager at Aberdeen Asset Management Asia. “The thing we can agree on is that the market volatility is going to increase…the volatility is not good for the broader markets, and that’s why you see weakness in foreign exchange and equity.”

“Right now, the UK’s decision is the headline that keeps the Fed on hold, likely until September,” opines Jim Vogel, head of interest-rate strategy at FTN Financial via The Wall Street Journal. “At a minimum, they have to wait out the vote and its immediate aftermath.”

Meanwhile, The Guardian reports that a new poll shows that a slim majority of voters—52%–want to leave the EU. “These results are consistent with the generality of numbers over the last couple of weeks, in which there has been some weakening in the remain position,” says Professor John Curtice of Strathclyde University. “It was already plain that this race was far closer than the prime minister intended and he must now be feeling discomfort at the thought that the outcome really could be in doubt,” says the professor, who’s been closely analyzing the polling data.