Brexit: You would be surprised what makes up voters' minds
All sorts of events could impact the outcome of the EU referendum. Justin Doyle and Philip O'Sullivan of Investec, Ireland, take a look
The EU referendum campaign does not appear to have been a major factor in the recent local and regional elections in the UK, which involved only modest seat changes for the larger parties.
With those out of the way, the focus should now swing back to the pressing issue of Britain's future in Europe.
As Treasury dealers and economists, we're always looking to the future to establish what factors influence markets.
With just under six weeks to the referendum, there are plenty of events that give clues on the ebb and flow of the campaign.
Some have a political and economic dimension, such as the publication of migration statistics, a likely by-election and the impact of high-profile television debates, while other major social, sporting and cultural events, such as music and sport, can also have an impact.
Turning first to politics and economics, the UK Government is set to publish new EU migration statistics this month. If, as the pro-Brexit camp claims, they show a higher level of inward migration from the rest of the EU than official numbers, this could boost the leave vote.
A by-election is also in the offing following Sadiq Khan's victory in the London Mayoral race for a marginal seat in Tooting, South West London, where Labour has a majority of 2,842. It is likely to take place just weeks before the referendum.
We'll also start to see the impact of the television debates which start in Glasgow on Thursday, aired by the BBC. As with last year's General Election, David Cameron is being cautious and is very unlikely to accept Leave campaigner Boris Johnson's offer of a 'head to head' debate.
Moving to the social, sporting and cultural side, the first day of the Glastonbury music festival takes place on June 23, which poses some interesting questions - could this rob the 'remain' camp of pro-EU tending younger voters? Do they have postal votes? Would they vote anyway?
The European football championships will also have kicked off and the 'group phase' will have ended on the eve of the referendum with results fresh in the minds of voters. How will the progress of the home nations affect sentiment? Does a successful first fortnight help the 'remain' or the 'leave' camp?
Of course, there are always unforeseen issues emerging that could sway public sentiment. In any event, there will be no shortage of noise in the remaining weeks of the campaign, which could lead to more volatility in FX markets.
So how will that impact sterling? Are we seeing the calm before the storm?
Our continued concern over deteriorating UK economic sentiment surveys, on approach to the referendum, appears to have been well founded. A trident of disastrous UK Purchasing Managing Index (PMI) surveys on the May 3, 4 and 5 served to demonstrate how concerned British business is at the prospect of a Brexit.
Significantly lower manufacturing, services and construction PMI patterns helped to push the pound off multi-week highs of just above €1.2820 to trade close to €1.2580 recently. But the pound seems quite happy to sit back and take a breather. The past seven days have seen the GBP/EUR rate mired around €1.2610/€1.2745, its tightest range in nearly six months.
Probably more worrying though, are the results of a survey conducted by Ipsos in nine EU countries that showed a majority of voters in Germany, Italy, Sweden and Hungary thought that a Brexit vote would result in other countries following the UK's lead.
Moreover, over half of French and Italian voters believed that there should be a referendum in their own countries, irrespective of the result of the UK vote.
Of course, snap polls such as these can mean little, especially as eurozone voters would eventually come to terms with the consequences of leaving the euro. However, they reveal a less than ringing endorsement of the EU.