Brexit hedging leaves Ficc books unbalanced

Market-making desks struggling to recycle some client flows ahead of referendum

"To some extent we have to warehouse those risks – that is part and parcel of what we do"

Bank market-makers are struggling to recycle some interest rate and inflation client flows targeting the UK's referendum on membership of the European Union, say traders, meaning they have to warehouse positions that could lead to losses if the vote today (June 23) results in a violent market move.

The referendum has two possible outcomes – either the UK remains in the EU or leaves. An interest rate options trader at one major dealer says his desk is trying to keep its exposure flat through the