16.06.201606:56:00UTC+00Boe Monetary Policy: Last One Before Referendum

British Sterling has been very volatile lately as investors and traders are becoming nervous as the referendum date closes in. Moreover, in last few polls, exit camp has taken major leads over the stay camp

• Despite recent polls predicting exit, several polls of polls suggest that any lead is very narrow (between 2-5 percent), which means there are considerable uncertainties surrounding the outcome.

In addition to that, the options market is showing implied volatility has surged in Sterling/Dollar and Sterling/Euro near all-time high around 30 percent, which means there could be violent moves in FX market, post-referendum

all the uncertainties, Bank of England (BoE) is scheduled to announce monetary policy at 11:00 GMT.

Policy wise, not much is expected from BoE other than to maintain it steady. However, it may lay down the measures it is going to take to assure market of lesser uncertainties. We expect BoE to announce that it will be keeping ample liquidity and all its swap line ready to tackle any major turmoil, at least once more.

It is also very likely that it will once again warn that an exit will pose major uncertainties surrounding Britain’s economy. In addition to that, it may also announce or rather remind that bank of England (BoE) is an independent body, especially after Governor Carney received threatening letter from a Brexiteer MP, which was confronted by the Governor early in the day.

Pound is currently trading at 1.413 against Dollar.