Enda Homan is going to pull an all- nighter - and he can barely wait.The senior foreign-exchange trader at Allied Irish Banks in Dublin will be glued to his screens through dawn as British voters decide whether to remain in the European Union.It promises to be a record-setting evening, whether in regards to trading volatility or in gallons of coffee taken in.
" It is a special opportunity for traders, most likely not seen since 1992 Black Wednesday," he said, describing the September day when the UK government withdrew the pound from a European exchange-rate system.Throughout Europe, traders and their companies were making preparations for a big night. JPMorgan Chase booked hotel rooms near its Canary Wharf offices, while Barclays was bringing in sleeping bags and sending out some staff members home early so they might be fresh later on. Other banks were offering bunk beds, sushi and pizza.
" All the trading desks remain in war- preparation mode," said Frederic Ponzo, managing partner at GreySpark Partners, a monetary consulting firm, in London." Volatility is expected to surge up possibly more than throughout the Swiss unpeg event and volumes to possibly overwhelm them and their systems."Trading was crazy and orders delayed last year when the Swiss National Bank unexpectedly eliminated its cap on the franc.
With polls revealing a tight contest, traders were poised to push the buy or sell buttons as early outcomes ended up being understood. Because forex is the only major market that trades 24 hours a day, they could not manage to miss a second: Aite Group stated revenues or losses could reach hundreds of countless dollars in a market subject to wild interruptions.
It will be a wild time for sterling: depending on how the vote goes, the pound will either sink to the most affordable level in more than three years or climb toward the highest this year.About US$ 140 billion (HK$ 1.1 trillion) in money is waiting to be invested, according to Barclays, and financiers' holdings of money are the highest since 2001, according to a Bank of America study.
"Much of the frenzied last-minute activity will occur in the hour or 2 before the early outcomes emerge, indicating that UK bank staff will work carefully with their equivalents in Asia - the free market at the time - to roll or change whatever hedge has to be maintained," stated Javier Paz, a senior analyst atBoston-based consulting firm Aite Group.
Equity traders too will be in early, long prior to the exchange opens at 8am London time. "The entire team is coming in at 2am, when we're likely to start to get a feel for the outcome," stated Ben Kumar, an investment supervisor at Seven Investment Management in London who assists manage the equivalent of about US$ 15 billion.
Results are scheduled to come in through the night, with the Press Association estimating the first at about midnight regional time. By 3.30 am, it predicts, more than half of the vote will have been tallied and the ballot count will be finished by 7am.