Uncertainty Rises Over UK Elections
ECB in Focus
Sterling Set to Explode in Either Direction
Market Recap – This week in a nutshell:
Markets wobbled this week as Former FBI Director James Comey prepares to testify in front of the Senate Intelligence Committee today and as the UK elections are formally underway. Comey is expected to answer questions regarding president Donald Trump and his alleged pledge to ease off on a probe into Michael Flynn, the former national security advisor. Investors will be looking closely at early UK election poll metrics as voters from England, Wales, Scotland and Northern Ireland head to the polls.*
Thu, June 8: In Today’s Markets…
1. Tension Rises as UK Elections Unravel
The world’s on edge today over a set of events, from rising tensions in the Middle East to an uncertain U.K. election, to the turmoil surrounding the Trump administration and an upcoming testimony by Comey. The Markets will largely be focusing on the outcome of the U.K. election as polls show more and more tightening into the vote. It is worth noting that the sterling was last seen trading higher against the dollar at $1.2963 as of 7:40. A long rally yesterday pushed the GBP to two week highs against the greenback.*
2. European Markets Open Higher, ECB in Focus
European Markets opened higher today as investors focus on the UK Elections and the latest ECB key interest rate decision. It should be noted that current consensus is that policymakers at the European Central Bank will carry on with their large monetary stimulus. However, today’s ECB key interest rate decision will unveil their future views on inflation and how long they plan to maintain their stimulus measures and leave monetary policy unchanged.**
3. Sterling Set to Explode in Either Direction
When PM Theresa May called for a snap election, the pound noted a major rally but the event was soon shrugged off as preliminary polls revealed that the two major parties narrowed their lead. The campaign became quite tight and every new poll affected the sterling pairs. Uncertainty is very high today and opinion polls currently go in very different directions. With leads of between 1% to 11% for the Tories, a lot depends on the turnout. Current consensus is that Theresa May will be able to maintain her position as the UK Prime Minister and the pound is set to firm. A surprise Corbyn victory however could cause the sterling to plummet to possibly unprecedented lows.***
*Source: Reuters
**Source: CNBC
***Investing.com
