Daily Market Color June 20, 2016Risk Assets Surge As Brexit Momentum Eases US stocks are opening the week higher while Treasurys are selling off across the curve after the latest UK referendum polls from this weekend showed the “Remain” camp moving back into the lead over the “Leave” camp. Campaigning resumed yesterday after being temporarily halted following the murder of British politician, Jo Cox, on June 16th. While the situation remains fluid and the polls show neither side has taken a commanding lead, the momentum has clearly shifted back in the “Remain” camp’s favor, as betting markets now only suggest a 30% chance of a Brexit compared, with a 43% chance a week ago. The US data calendar is extremely light this week (and nonexistent today), so the UK referendum is likely to continue to dominate the market headlines/direction. The other notable event taking place is Fed Chair Yellen’s semiannual Humphrey-Hawkins testimony. Yellen acknowledged last week that the British vote was a factor in the Fed’s decision to leave interest rates unchanged at the June FOMC meeting. She will testify before the Senate Banking Committee tomorrow followed by the House Financial Services Committee on Wednesday, so the market will be watching those events for new FOMC policy change indicators. All three major US stock indexes are currently up over 1%, while Treasury yields and swap rates are 4-6 bps higher across all maturities. Oil prices increased for the second straight day, with both WTI and Brent crude currently up over 2.5%.