Halister News

(Bloomberg) -- BlueBay Asset Management closed a short GBP position last week and added a short position in gilts on the view that yields are likely to rise after the U.K.’s EU vote, Senior Portfolio Manager Mark Dowding says in phone interview.

• Fund is now neutral on the pound, after taking profit on short position based on view U.K. will vote to remain in EU
  • Dowding expects GBP/USD to rally above 1.50 shortly after the vote
  • Cable could rise above 1.55 or even further in case of a clear-cut victory for “remain”; says investors will focus on the decisiveness of the victory and potential scope of political upheaval
  • 10-year gilt yield could rise toward 1.4% on a “remain” vote
• Dowding expects momentum to build on the remain side in the days into the vote, after markets overpriced the risk of an exit vote last week and excessive level of anxiety
  • Remain vote more likely after last week’s volatility
  • “You needed a Brexit scare to encourage voters to get out and vote,” he says
• Dowding still considering whether he will await the vote results at his desk or log in early in the morning
• NOTE: BlueBay AUM is USD58bn, according to Dowding
• NOTE: To subscribe to our referendum night live blog, click here.