Into Election Week we go. For many, including the British electorate, there will the hope for an end to the Brexit saga.
Live televised debates and Q&A sessions may have ultimately gone in favor of the Opposition Party. But, the lead and the reality of Brexit looks to have given the Tories the lead with just 5-days remaining.
Market confidence going into the weekend remained, in spite of a pullback in the Pound against the Greenback. The pullback was data-driven rather than election sentiment-driven, or so it seemed.
We had seen the Pound hit choppy waters ahead of key live televised debates and last Friday was no exception.
With the U.S President on his way back to the U.S, there was little interference to trouble the markets.
So, as things stand…
The Opinion Polls
YouGov released its latest opinion poll tracker results, covering the opinion polls from 5th and 6th December, on the weekend.
After a narrowing in support for the Tories, the Pound’s rise to 7-month highs was vindicated if the polls are anything to go by.
According to the latest Polls,
- The Conservative Party saw their share of the vote increase from 42% on 3rd December to 43% on 6th
- This reversed a fall from 43% on 29th
- In spite of the uptick, the share of the vote continued to sit well below the 15th November high 45%.
The Opposition Party,
- The Labour Party’s share of the vote held steady at 33% over the same period.
- Whilst holding steady, this was down from the Labour Party’s high 34% on 29th
- In spite of a widening in the Tory Party lead, the lead remains significantly narrower than the widest margin aback on 15th
- On 15th November, the Tories had a 17 point lead. As of the latest survey, the lead stood at 10 points.
- Good news for Johnson and the Brexiteers is the double-digit lead in the final run to Election Day.
For the remaining parties,
- The Liberal Democrats saw a slight increase in support, bringing to an end a downward trend that began back on 22nd
- Since the start of November, the Lib Dems have seen their share of the vote fall from a high 17%.
- The rest of the minority parties lost support at the end of the week, as voters moved across the Tories and the Lib Dems.
The latest bookmakers’ odds saw some minor changes from late last week.
According to Oddschecker,
For the Tories,
- Odds for the Tories to win with an overall majority widened from 2/5 to 3/8 over the weekend.
- The widening came off the back of a widening from 1/2 to 2/5 mid-way through last week.
- For the Tories to win the most seats, these held steady at 1/20 after having moved from 1/16 in the week ending 29th
- This came off the back of a move from 1/14 to 1/16 ahead of the weekend of 23rd November.
For the opposition party,
- Oddschecker has the odds of Labour winning the most seats at 14/1, narrowing from 16/1 from the middle of last week.
- The odds of an overall Labour majority moved from 25/1 to 11/4, however, after having held steady at 25/1 mid-week.
With the Lib Dems continuing to struggle, the odds of a hung parliament moved from 5/2 to 11/4. This came off the back of a widening from 2/1 to 5/2 mid-week.
Over the weekend of 23rd November, Oddschecker had the odds of a hung parliament stand at 11/5.
UK bookmakers had the odds of a hung parliament at 5/4 in the 1st week of November.
In spite of the uncertainty of Election Day, the Bookies are going for an all-out Tory win…
The opinion polls and the bookmakers continue to have the Tories as the likely victors in next Thursday’s election.
Electoral Calculus has also continued to predict a Tory Party majority this time around. The predictions had raised some uncertainty ahead of the weekend. The latest predictions, however, may well alleviate some of that uncertainty.
For the Tories,
- Electoral Calculus predicts the Tories to win 348 seats, which would give a majority of 46. The latest prediction was based on opinion polls from between 2nd and 7th
- Ahead of the weekend, Electoral Calculus had predicted a 20 seat majority.
- Mid-week, Electoral Calculus had predicted the Tories to win 339 seats, which would have given a majority of 28 seats.
- This is good news for Johnson and the Brexiteers, with the majority now well above the recent low 12 seats.
For the Opposition Party,
- Labour has seen their predicted number of seats fall from 229 levels from the middle of last week to 225 seats this weekend.
- While narrowing from recent highs, the number of seats remains well above 208 levels back at the end of November.
The Remaining Parties,
- The Scottish National Party have seen their predicted number of seats fall to 41, down from a high of 47.
- It’s not been spectacular for the LIB Dems either, with the Pro-Remainers predicted to win just 13 seats…
It was a spectacular week for the Pound last week. Well, at least for those looking for a run at $1.40 levels and a resounding Tory Party victory.
A return to $1.31 levels and 7-month highs came in spite of the markets having been badly bitten twice before.
Back in 2016, the EU Referendum caused mayhem that resulted in margin calls closing out a large number of smaller brokerages.
In 2017, Theresa May took a gamble that left the Tories with a minority government that ultimately ended any chance of delivering Brexit.
The Brexit deadlock was not only frustrating for the EU and Britain but also for the global financial markets.
We may not have seen the Pound return to the post-EU Referendum flash-crash low of $1.19048, but, we did see sub-$1.20 levels back in September.
Johnson’s return to British politics and easing into Number 10 has been the Pound’s key support mechanism.
Not only did he manage to renegotiate a Brexit deal but, he also managed to get Parliament to vote in favor of the deal.
That’s quite an achievement, recognized by a Pound that is up 9.8% from the 2nd September 2019 low to Friday’s close.
There could be more upside going into Thursday’s election if the polls, predictions, and odds continue to demonstrate a return to supremacy for the Tories…
It still leaves a long way down, if voters defy the odds, however. Could we see some jitters ahead of the big day?
This article was originally posted on FX Empire
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