“Part of the tailwind in gilts has to do with bond markets pricing in almost a 45 per cent chance of an [interest] rate cut by the Bank of England this year – which clearly reflects Brexit risk.”
Fidelity head of European equities Paras Anand said he expected this week’s and post-result volatility to be more subdued. He said given the withdrawal to cash already seen, markets, pre-vote, could not fall much further.
On post-referendum markets, Mr Anand said: “Risk appetite will return but in a steady way. The markets are not [significantly affected] by events they anticipate and analysed. Markets are more thrown around by left-field events.”
26bps: Fall in the 10-year gilt yield since June 1
5.7%: Allocation to cash according to the BAML global fund manager survey