7 May 2015
Will sterling continue to bid after UK elections? - SG
FXStreet (Guatemala) - Kit Juckes, Global Head of Currency Strategy at Societe Generale noted that the latest polls still suggest that the Conservative party will have the highest number of seats in parliament.
Key Quotes:
"They also suggest that even with the support of the Liberal Democrats (not a done deal by the way) the combination will be well short of a majority."
"Can the Conservatives muster enough support from small parties to form a government that can pass legislation and avoid losing a vote of no confidence? That's unclear but they may have enough seats to try."
"The possible Labour/SNP/(Libdem?) combination by contrast looks big enough to govern, on recent poll soundings, but how long will it take them to dislodge Mr Cameron from Downing Street?"
"All will be clearer by Friday's London open. In the meantime, if the expression of intent from clients is a gauge of anything, there is more appetite to buy GBP after the result is known, than to sell it. For choice, I would rather be short sterling and long long-dated gilts, particularly if the gut reaction in the market is to buy the currency."
Key Quotes:
"They also suggest that even with the support of the Liberal Democrats (not a done deal by the way) the combination will be well short of a majority."
"Can the Conservatives muster enough support from small parties to form a government that can pass legislation and avoid losing a vote of no confidence? That's unclear but they may have enough seats to try."
"The possible Labour/SNP/(Libdem?) combination by contrast looks big enough to govern, on recent poll soundings, but how long will it take them to dislodge Mr Cameron from Downing Street?"
"All will be clearer by Friday's London open. In the meantime, if the expression of intent from clients is a gauge of anything, there is more appetite to buy GBP after the result is known, than to sell it. For choice, I would rather be short sterling and long long-dated gilts, particularly if the gut reaction in the market is to buy the currency."