Global Stocks Are Soaring as Fears of a Brexit Fade

Sterling has been at the sharp end of worries Britons will vote to leave the European Union, and the easing of those concerns pushed the pound up 1.9% against the dollar – on track for its biggest daily gain since October 2009 – and more than 2% versus the yen.

Share prices, which fell globally in recent days on prospects of Britain quitting the bloc as some polls showed the “Leave” campaign ahead, rose strongly.

Wall Street looked set for a positive open, with index futures up 1.2-1.3%.

The pan-European FTSEurofirst 300 index added 3.7%, led by a 4.5% rise in banks, while Britain’s blue-chip FTSE 100 index chalked up a 3.2% gain.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.7%. Japan’s Nikkei climbed 2.4% as the yen lost ground.

Two weekend polls showed “In” regaining the lead and another showed the “Out” campaign’s lead narrowing, though the overall picture is of an evenly split electorate. Bookmakers’ odds have shown those wishing to stay in the EU ahead and Betfair put the implied probability of a vote to “Remain” at 72% on Monday, up from 60-67% on Friday.

Campaigning resumed on Sunday, having been suspended for three days after British lawmaker Jo Cox was killed in the street in her constituency on Thursday.

Sterling rose as far as $1.4671 and was last up 1.9% at $1.4628, having hit a two-week low of $1.4013 on Thursday. It soared 2.3% to 153.00 yen and 1.5% against the euro to 77.36 pence.

“The momentum has changed, and perhaps this is the first sign of what a lot of the polling experts had been suggesting, which is that the ‘don’t know’ portion was going to be crucial and historically there tends to be a shift towards the status quo in the final days before a referendum,” Bank of Tokyo-Mitsubishi UFJ’s European head of global markets research, Derek Halpenny, said.

“I think that’s what the market is reacting to.”