Stock markets around the world are surging higher today on speculation that Remain could win today's Brexit Referendum. The Dax is up 2.2% while the FTSE is up 1.5% and US index futures are up 1.0%. ‎Crude oil is also benefitting from risk-on sentiment with Brent up 1.9% and WTI up 1.6%. Speculation on the results in currency markets has capital flowing out of defensive havens and back into Europe. Gold is down another 0.5% while JPY is finally starting to crack with‎ its recent strength fading as USDJPY pops back up above 105.00. Meanwhile GBPUSD has cleared $1.4800 to trade at its highest level in monthe and EURUSD has jumped a penny toward $1.1400. Even with these moves traders should recognize it's not a good day to get complacent. Although market and betting action (bettors indicated client activity suggested about an 80% chance of a Remain win) has come in on one side, anything can happen in the polling booth. The last published polls were still suggesting a very close ‎race with neither side leading by more than a few percentage points. Today's market and betting sction suggests that at this point a Remain win may be getting priced in already so follow through could be brief. Because of this a Leave win could be seen as a bigger surprise and could generate more market volatility if it occurs.‎ That being said the really extreme drops predicted by some people (say more than 10%) appear unlikely considering the number of central banks who have indicated plans to step in and manage volatility if needed. Overnight flash PMI reports showed German manufacturing improving, but German services missing and both French reports under 50 and falling. Today brings US flash manufacturing PMI and jobless claims which may attract some attention from traders trying to figure out where the US economy is headed between the nonfarm payrolls disappointment, Bullard's dovish swing and Yellen's neutrality. For the most part, trading in Canada today may be driven by international events and commodity price trends. Blackberry, however, could be active on its earnings report. Results were mixed beating the street on earnings but missing on sales. The company indicated it still expects software and services revenues to grow 30% this year. Brexit Trading Preview The Brexit referendum results have had a significant impact on trading in recent weeks and may drive markets swings in the coming days as traders digest the decision. Action may be focused on Sterling (GBP), particularly relative to the Japanese Yen (JPY), Euro (EUR) and US Dollar (USD). Since the start of the year, GBPUSD has been trading in a wide range between $1.4000 and $1.4800. The recent rally from the bottom of this range to the top reflects a swing in sentiment expecting a Leave win to one expecting the UK to vote to Remain in the EU. It would appear that GBPUSD has priced in the odds of a vote to Remain at $1.4000 0%, $1 4250 25%, $1.4500 50%, $1.4750 75% and $1.5000 100%. GBPUSD has already broke out over $1.4800 and approached $1.5000 in early trading today. Once the results are out, GBPUSD could trade to either end of this range with the potential for an overshoot toward the $1.5200 to the upside and the February low near $1.3850 to the downside. Despite forecasts of even more extreme swings from some quarters, these appear unlikely because the higher the volatility the higher the potential central banks would step in to intervene. In recent days, the ECB, Bank of Japan, Fed, Riksbank, Swiss National Bank, G-7 and others have indicated they are ready for the results and prepared to step in and stabilize markets if needed. The last thing these countries want is a big GBP devaluation driving up the valuation of their own currencies, exporting deflation to their countries and undermining their own monetary stimulus programs. Defensive havens like gold, JPY, USD, CHF and bonds may be active reflecting traders’ expectations following the vote. If traders become fearful, capital could flow out of stocks and other risk markets into defensive havens driving them higher. On the other hand, a relief rally like the one markets staged earlier this week could send stocks higher and those markets lower. Key levels include Note that while a Leave vote could weigh on the FTSE, if the pound were to crash it actually could send the FTSE sharply higher because it would make the shares of UK based multinationals suddenly much cheaper than their peers. Current trading and betting suggests that traders are pricing in about a 75% chance of a Remain win regardless of how close the result may be. With many polls indicating a very close race right to the wire, there is still a chance that Leave could win, with some people forecasting that the voter turnout may end up deciding the result. Based on current trading, a Leave win would come as a slightly bigger surprise than a Remain win so we could see more volatility and larger moves on a decision to Leave than one to Remain which was priced in earlier this week. It’s also possible that with the race so close, we could still see significant swings in both directions in the coming days. Corporate News Blackberry ($0.03) vs street ($0.09), total sales $487M below street $561M, software sales $166M vs street $156M Economic News Upcoming significant economic announcements include: 8:30 am EDT US jobless claims street 270K 9:45 am EDT US Markit flash manufacturing PMI street 50.9 10:00 am EDT US new home sales street 560K vs previous 619K 10:00 pm BST Thu UK Brexit polls close 5:00 pm EDT Thu 7:00 am AEST Fri CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.