We think the “probabilities” for a Brexit this time are much lower than the polls indicate from a those in favor versus exiting the EU perspective. In other words, probabilities of final outcome are what is important not the percentages who are in favor of staying versus the percentages who are in favor of leaving from a polling standpoint.
It doesn`t matter what the individual percentages that the polls advertise, and I take all these polls with a huge grain of salt anyway. I would say that there is probably an 85% event probability that they stay in the EU, that may be a little high, maybe 70% but an exit at this time from the EU is not near as likely as the polls seem to project. People focus on the wrong dynamic, and the odds makers and bookies get this distinction between event probability and polling data.
And the financial media loves a story to get behind and hype given that they have 12-15 hours a day of financial news time to fill which can usually be summed up in an hour. The financial News media usually makes a Mountain out of a Molehill, even if Brexit occurred markets would get bored with the story pretty quickly, after the initial shock.
Central Banks and their massive ineptitude are far greater and important market dynamics than whether the European Union slowly devolves into a smaller trade pact agreement between European countries. I would be a buyer of any Pound weakness on a Brexit shock vote, as from a longer term currency standpoint, the risk reward setup looks attractive all other things being equal.
First published here: http://j.mp/1WWAwTp