On the first trading day of the fresh week, participants pounced on sterling after weekend polls suggested the Tories may achieve a significant majority in December’s general election. The pound rose almost 0.50% against the greenback and a similar amount against the shared currency. While all polls should be taken with a pinch of salt (esp. given some recent political outcomes across the globe), a common theme is occurring. This is that the Conservatives are consistently ahead in the polls, ranging from between 4 – 10% ahead. The more this trend continues the more likely sterling is to rise. Markets are always forward thinking and will begin to price such outcomes in.
There are very few pieces of UK data set for release this week; the majority of focus will be on the general election and various interviews and campaign pledges the candidates will all partake in. The Tory manifesto, released over the weekend, displayed a party who have purposely chosen to play it safe, with no new radical ideas which might rock the boat. After all, it was just after the announcement of the Conservative manifesto in 2017 which led the Theresa May’s demise in polling and, ultimately, failed election outcome.
Today’s calendar is rather light on economic data. The main focus will be on our friend across the Atlantic who have consumer confidence and new home sales scheduled in the afternoon session. Trading conditions may begin to slowdown from today onwards as Thanksgiving holidays start to kick-in across America.
Written by Viv Savani. 8:51am, November 26th 2019
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