NEWS AND ANALYSIS

Incisive market commentary and expert opinion

Stay ahead with our market commentary and webinars from our in house market strategist

Open a Live AccountOpen a Demo Account
 
+ Show blog menu

Categories

Menu

Collapse 2017 <span class='blogcount'>(290)</span>2017 (290)
Expand September <span class='blogcount'>(25)</span>September (25)
Expand August <span class='blogcount'>(26)</span>August (26)
Expand July <span class='blogcount'>(32)</span>July (32)
Expand June <span class='blogcount'>(28)</span>June (28)
Collapse May <span class='blogcount'>(35)</span>May (35)
Tory Poll Lead Narrows Sharply - Video Update
31 May 2017
S&P 500 and NASDAQ break winning streak
31 May 2017
Sterling swings on polls - PM Bulletin
30 May 2017
Equities drift after long holiday weekend - AM Briefing
30 May 2017
Crude oil slumps on OPEC disappointment - AM Briefing
26 May 2017
OPEC disappoints while FOMC minutes provide cheer - Video Update
25 May 2017
OPEC expected to agree 9-month extension - AM Briefing
25 May 2017
Look-ahead to OPEC - Video Update
24 May 2017
Markets quiet ahead of FOMC minutes and OPEC - AM Briefing
24 May 2017
Crude oil update - OPEC meeting in focus - PM Bulletin
23 May 2017
Markets shrug off atrocity in Manchester - AM Briefing
23 May 2017
Equities mixed, but supported by oil
22 May 2017
Nerves steady after firmer close on Wall Street - AM Briefing
19 May 2017
Political fall-out continues to weigh on markets - Video Update
18 May 2017
Slide in European indices accelerates - AM Bulletin
18 May 2017
Trump’s woes hit markets - Video Update
17 May 2017
Trump’s woes lead to market wobble - AM Briefing
17 May 2017
EURUSD hits six-month high - PM Bulletin
16 May 2017
Crude oil extends rally - AM Briefing
16 May 2017
US inflation data and retail sales in focus - AM Briefing
12 May 2017
Crude oil recovers after “flash crash”- Video Update
11 May 2017
Crude oil soars while equities drift - AM Briefing
11 May 2017
Are investors too complacent? - Video Update
10 May 2017
Investors rattled after Trump fires FBI head - AM bulletin
10 May 2017
Crude oil’s “flash crash” leads to OPEC desperation - PM Bulletin
09 May 2017
Equities rally as oil steadies - AM Briefing
09 May 2017
Forex: Top Ten Tips for beginners - Trading Guides
08 May 2017
Markets little moved after Macron win - AM Briefing
08 May 2017
Payrolls in focus - AM Briefing
05 May 2017
NFP look-ahead - Video Update
04 May 2017
FOMC hints at rate hike in June - AM Briefing
04 May 2017
FOMC look-ahead - Video Update
03 May 2017
Apple disappoints on sales numbers - AM Briefing
03 May 2017
CFD Trading Tips - Trading Guides
02 May 2017
European traders return after May Day - AM Briefing
02 May 2017
Expand April <span class='blogcount'>(31)</span>April (31)
Expand March <span class='blogcount'>(38)</span>March (38)
Expand February <span class='blogcount'>(36)</span>February (36)
Expand January <span class='blogcount'>(39)</span>January (39)
Expand 2016 <span class='blogcount'>(483)</span>2016 (483)
 
 
 

 

The UK General Election takes place in just over a week’s time. This being the case, and in the absence of any other significant economic or geopolitical events, we can expect moves in sterling to be closely linked to the results of opinion polls over the next seven days.

As we’ve seen ever since Prime Minister Theresa May called the snap election back in mid-April, the British pound does better when the Tories look like winning comfortably, and worse when their poll lead narrows. This isn’t just an issue of investors believing the campaign rhetoric. It may be the case that a Conservative win ensures a “strong and stable” future under Theresa May while success for Jeremy Corbyn is likely to result in a “coalition of chaos.” But what happens to sterling is much more about the success (or otherwise) of the UK’s Brexit negotiations with Europe. In fact, unity and strength heading into these negotiations was very much Mrs May’s reason for calling the election in the first place. This seemed to go down well with voters. Back then she had an extraordinarily large poll lead - one that translated into something like a hundred seat majority. This was subsequently reflected in local election results which even gave the Tories gains in the North of England, Scotland and Wales. Unfortunately for the Conservative campaign, things have unravelled ever since, culminating in a disastrous U-turn on a manifesto commitment on social care. The Tory poll lead stands at around 5% now. Some analysts are saying that if May’s team can’t turn this around then the risk is of a hung parliament. At the same time, Mr Corbyn seems to be cutting through to the public, despite far-left manifesto commitments to tax, spend and nationalise, and a very shaky understanding about just how much everything will cost.

Now it could be that the Tories are just experiencing a typical mid-campaign wobble. But if they find themselves unable to recapture a decent poll lead in the next few days, investors will start to worry.  And if that’s the case, we could see sterling struggle from here on in. 

https://www.spreadco.com/assets/30.05.17.png

 

Posted by David Morrison

Tagged: Bulletin PM

Category: PM Bulletin


Add a comment Add comment            

 

 
© 2017 Spread Co Limited. All Rights Reserved.

Spread Co Limited is a limited liability company registered in England and Wales with its registered office at 22 Bruton Street, London W1J 6QE. Company No. 05614477. Spread Co Limited is authorised and regulated by the Financial Conduct Authority. Register No. 446677.

Spread betting and CFD trading are leveraged products and can result in losses that exceed your deposits. Ensure you understand the risks.

Losses can exceed deposits. Click here to learn more.