Banks and business leaders around the world have issued stark warnings to their clients about possible market volatility should the majority of the U.K. public vote to leave the European Union in a referendum on Thursday.
As the countdown to voting began, notes were issued by financial institutions warning of the immediate impact of a Brexit vote on global financial markets – especially those based in the City of London. Broadly, opinion polls show that the vote is too close to call with equal support for the remain and leave camps.
Credit Suisse issued a note on Wednesday warning of market volatility in the immediate aftermath of the result, which is expected to become clear around 4 a.m. London time on Friday morning.
"The correlation between betting market odds and global risk appetite has been extraordinarily high in the past few weeks. That suggests an immediate, large and highly correlated move in both safe and risk assets once the outcome is clear," the analysts said, adding that "a leave vote could push our measure of risk appetite into panic."
Separately, Credit Suisse said it would cut its year-end FTSE 100 target by 6 percent if a Brexit occurred, Reuters reported.
The analysts noted that two factors would be immediately important after the vote: the margin of a leave vote and "when, or if, the U.K. activates article 50 of the EU treaty."