On a quiet data week, financial markets the world over are focused on one thing and one thing only: Thursday’s referendum in the UK on whether to leave the European Union.
For a simple yes or no question, the market reaction will be enormous, making volatility seen earlier this week look like a gentle ripple in comparison.
With so much riding on the outcome, it is perhaps an opportune time to look at when voting will begin, end, and when the outcome will likely be known to markets.
That’s exactly what Richard Franulovich, Rob Rennie and Sean Callow, members of Westpac’s FX strategy team have done, producing this excellent synopsis on what to expect.
Here are the key times to look out for, remembering that the vote will be held on Thursday, June 23 in the UK.
Polls open 7am UK time and close 10pm local time (7am Sydney time on Friday). There will be no exit polls during this time. We don’t believe either the BBC or ITV will conduct exit polls, though there are likely to be privately commissioned polls which may add to confusion in Asian trading.
Counts will get under way when polls close at 10pm at 382 local centres around the UK. First results are likely by midnight UK time and by 3am/4am (12/1pm Sydney) it is likely the outcome will be known.
Depending on turnout it is likely we should have a clear understanding of the likely result well ahead of the final outcome being announced by a chief counting officer at Manchester Town Hall at 9am UK time.
For those who were not aware, voting is not compulsory with a straight majority (50%+) required to decide the referendum. Obviously turnout levels will contribute to how early the result is known.
A vote to leave the EU will create the largest, and most detrimental, impact on financial markets. This is especially so given markets have now seemingly adopted the view that such an outcome is unlikely to occur.
A “remain” vote is now close to priced in, creating additional downside risks for markets should the opposite scenario prevail.