Daily Insight
Group Economics Macro & Financial Markets Research
12 April 2016
Brexit polls on a knife edge Nick Kounis Head Macro & Financial Markets Research
Recent EU referendum polls in the UK point to a narrowing gap…
…as more undecided voters shift to the Leave camp
The risk of a Brexit is higher than generally supposed and we see more
Tel: +31 20 343 5616 nick.kounis@nl.abnamro.com Joost Beaumont
downside for sterling
ECB steps up QE purchases, mainly on the back of government bonds rather than covered bonds
Senior Fixed Income Strategist Tel: +31 20 628 3437 joost.beaumont@nl.abnamro.com
Our latest Brexit poll of polls suggests result is too close to call Recent opinion polls monitoring UK voting intentions in June’s referendum on the country’s membership of the EU point to a narrowing gap between the Remain and Leave sides. Our poll of polls for the month of March points to an average 44% vote for Remain, which is unchanged compared to February. However, there has been an increase in the vote for Leave (up to 41%) at the expense of a decline in those undecided (15%). Early polling for April suggests a futher fall in those undecided, with Remain and Leave benefiting equally. In any case, the gap is now just 3 percentage points, which suggests the outcome is too close to call on the basis of polling. Indeed, we remain of the view that the risk of Brexit is higher that generally supposed and that there will be more downside for sterling as the risk premium builds ahead of the referendum. We see GBP/USD at 1.35 and EUR/GBP at 0.85 ahead of the June poll.
UK voting intentions in EU in-out referendum Poll of polls, %
55 50 45 40 35 30 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Remain
Leave
Source: Various polling organisations, ABN AMRO Group Economics
Insights.abnamro.nl/en
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Daily Insight – Brexit polls on a knife edge – 12 April 2016
Eurosystem steps up QE purchases Meanwhile, on Monday, the Eurosystem reported its weekly QE purchases for the first time since it increased the monthly target size. From April onward, the central bank will buy EUR 80bn in its large scale asset programme, while it will activate its Corporate Sector Purchase Programme only in June. This implies that the increase in QE should come from more government bond, SSA, covered bond, or ASBS purchases in the meantime. Yesterday’s numbers suggest that the central bank has indeed stepped up its weekly purchases, with the increase largely stemming from the PSPP programme. Indeed, purchases of government bonds and SSAs rose by EUR 18.8bn last week, which compares to a weekly average of around EUR 12bn previously, and representing the largest weekly amount so far. Meanwhile, the central bank seemed not to have increased its purchases of covered bonds, which increased by EUR 1bn last week, which implied that it bought around EUR 0.9bn in the secondary market according to our estimates. This, in turn, was roughly in line with the amounts that the central bank settled in previous weeks. Finally, ABS purchases remained modest at just EUR 0.2bn.
Breakdown of the Eurosystem’s APP EUR bn
25 20 15 10 5 0 -5 Apr-15
Jul-15 PSPP
Oct-15 CBPP3
Jan-16 ABSPP
Source: Bloomberg, ABN AMRO Group Economics
Mar-16
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Daily Insight – Brexit polls on a knife edge – 12 April 2016
Day
Date
Time
Country
Monday Monday Monday Monday Monday
11/04/2016 11/04/2016 11/04/2016 11/04/2016 11/04/2016
01:50:00 03:30:00 03:30:00 15:25:00 19:00:00
JP CN CN US US
Machinery orders private sector - % mom CPI - % yoy PPI - % yoy Fed's Dudley (voter) speaks in NY Fed's Kaplan (non-voter) in Louisana
Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday
12/04/2016 12/04/2016 12/04/2016 12/04/2016 12/04/2016 12/04/2016 12/04/2016 12/04/2016 12/04/2016 12/04/2016
10:30:00 12:00:00 14:00:00 15:00:00 21:00:00 22:00:00 15/04/2016 15/04/2016 15/04/2016
DE GB US IN US US US CN CN CN
CPI - % yoy CPI - % yoy NFIB small business optimisme - index CPI - % yoy Fed's Harker (non-voter) speaks on Economic Outlook Fed's Williams (non-voter) speaks Fed's Lacker (non-voter) speaks New loans - CNY bn Aggregate financing - CNY bn M2 money growth - % yoy
10:00:00 11:00:00 14:30:00 14:30:00 14:30:00 16:00:00 16:00:00 20:00:00
CN CN EC EC US US US CA US US
Exports - % yoy Imports - % yoy ECB's Knot in Dutch Parliament to discuss ECB Monetary Policy Industrial production - % mom Retail sales - % mom Prod. prices index excl food and energy - % mom Prod. prices index - % mom Policy rate - % Business inventories - % mom Fed's Beige Book
EC GB GB US US US US US US CN CN CN CN JP EC US US US US
Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday
13/04/2016 13/04/2016 13/04/2016 13/04/2016 13/04/2016 13/04/2016 13/04/2016 13/04/2016 13/04/2016 13/04/2016
Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday
14/04/2016 14/04/2016 14/04/2016 14/04/2016 14/04/2016 14/04/2016 14/04/2016 14/04/2016 14/04/2016
Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday
15/04/2016 15/04/2016 15/04/2016 15/04/2016 15/04/2016 15/04/2016 15/04/2016 15/04/2016 15/04/2016 15/04/2016
11:00:00 13:00:00 14:30:00 14:30:00 14:30:00 14:30:00 16:00:00 16:00:00 04:00:00 04:00:00 04:00:00 04:00:00 11:00:00 14:30:00 15:15:00 16:00:00 18:30:00
Key Economic Indicators and Events
Period
Latest outcome
Consensus
Feb Mar Mar
-9.2 2.3 -4.3
-11.9 2.4 -4.6
Mar F Mar Mar Mar
0.3 0.3 92.9 5.2
0.3 0.4
Mar Mar Mar
726.6 780.2 13.3
1100.0 1400.0 13.5
Mar Mar
-25.4 -13.8
10.0 -10.1
Feb Mar Mar Mar Apr 13 Feb
2.1 -0.1 0.0 -0.2 0.5 0.1
-0.6 0.2 0.1 0.3 0.5 0.0
Core inflation - % yoy Policy rate - % BoE size of asset purchase programme - GBP bn Inflation excl food and energy - % mom Inflation excl food and energy - % yoy Inflation (CPI) - % mom Inflation (CPI) - % yoy Fed's Lockhart (non-voter) speaks Fed's Powell (voter) appears before Senate Banking Committee
Mar F Apr 14 Apr Mar Mar Mar Mar
1.0 0.5 375.0 0.3 2.3 -0.2 1.0
1.0 0.5 375.0 0.2 2.3 0.3 1.1
0.2 2.3 0.3 1.1
Retail sales - % yoy Industrial production - % yoy Fixed investments - % yoy GDP - % yoy Industrial production - % mom Trade balance external EU - EUR bn Empire State PMI - Manuf. general business conditions - index Industrial production - % mom Univ. of Michigan cons. confidence - index Fed's Evans (non-voter) speaks on Economy and Policy
Mar Mar Mar 1Q Feb F Feb Apr Mar Apr P Apr P
10.2 5.4 10.2 6.8 -6.2 21221.2 0.6 -0.5 91.0 91.0
10.4 6.0 10.4 6.7
6.7
1.3 -0.1 92.2 92.2
-0.2 93.0 93.0
ABN AMRO
5.0
Source: Bloomberg, Reuters, ABN AMRO Group Economics (we provide own forecasts only for selected k ey variables and events)
Find out more about Group Economics at: https://insights.abnamro.nl/en/
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