Brexit or not, markets will stay volatile due to political events

AS June 23 approaches, the UK's referendum on European Union (EU) membership is taking centre stage in investors' minds. Indeed, daily newsflow on the topic, including ever more frequent opinion polls, has started to cause some of the volatility markets expected. With the economic arguments in favour of Bremain (the UK remaining in the EU) now well-aired, the referendum could now turn on the actual turnout of UK voters and on the more emotional topics of migration, immigration and Brussels bureaucracy. Keeping in mind our Euro 2016 narrative, the first half has gone to Bremain. . .

The UK government and a host of leading lights from the world of economics have thoroughly warned the British electorate that there would be significant costs to a Brexit. These include uncertainty over existing and future trade agreements, impact on current EU policies and even the possibility of disadvantageous terms post- renegotiation. It thus seems clear that the Leave campaign has lost this facet of the debate.

Having lost the economic debate, the Brexiteers are trying to shift the focus onto more emotional topics such as immigration, political accountability and bureaucracy.