FX Thoughts : The Inconsequential Elections And The Payrolls
The rule of thumb before has been to sell on election news and buy on election results, especially when a new party wins which buys the economy new hope, just like it did for Star Wars IV.
Yet this UK elections is all about the same 2 old parties and a potential political deadlock, neither with a majority win and weak alliances for a coalition government that will run the next 5 years.
Campaigns running on jingoistic slants will be the swing factors but I am honestly not bothered that much because we have 12.5% (last count) of the UK population being foreign born.
The Independent sets forth 6 possible outcomes. http://i100.independent.co.uk/article/what-happens-after-the-election-six-possible-outcomes-in-the-event-of-a-hung-parliament–gJWJWWbF_lb
- Labour “confidence and supply” government
- Labour-led coalition
- Labour minority government
- Conservative minority government
- Conservative “confidence and supply” government
- A Conservative-led coalition
Odds are showing Labour with a slight lead but a coalition is most likely.
Our take on the elections : https://tradehaven.net/market/ad-hoc-commentary-uk-elections-will-likely-produce-weak-coalition-possibly-even-political-sclerosis/
As it is, positioning in the GBP has been coming off since mid 2014 and pretty much flat-lining for most of this year as markets lose interest.
CFTC British Pound Net Futures Positions
Economic numbers are at their most disappointing in 5 months and construction has slowed to a 22 month low.
Citi Economic Surprise Index for UK (-100 – +100)