Friday, 14 December, 2018

Global markets: Sterling shaken by United Kingdom election shock, fallout limited elsewhere

Laurie Berry | 10 June, 2017, 12:43

The Conservative Party, led by Prime Minister Teresa May, lost its majority in the United Kingdom parliament on June 8, falling short of the required 326 seats.

At the moment it's hard to know from the numbers exactly who will form the next government, although the Conservatives are clearly the largest party and won the most votes.

If the final result shows no clear victor, that could put further pressure on the pound, says Samuel Tombs, analyst at Pantheon Macroeconomics. We effectively have a hung parliament with no party being able to command an overall majority, and this certainly isn't what Theresa May foresaw when she called the general election a few weeks ago.

While it is expected that May will keep the keys to number 10 Downing Street, there is now much uncertainty over how a big a majority her Conservative Party will end up with.

As reported at 11:03 am (BST) in London, the GBP/USD was trading at $1.2912, a gain of 0.08%; earlier, the pair had hit a session peak at $1.29506 while the low was at $1.28928.

Bets that another drop in sterling would flatter worldwide firms' profits pushed London's FTSE up around 0.6 percent, while the Frankfurt, Paris and Milan bourses made nearly as much.

"But now forecasts have changed.and so a (Conservative) majority might not be out of the question".

After Brexit, Donald Trump's win, this United Kingdom election, and the French election, markets are getting very used to political turmoil and uncertainty, and we have seen them largely shrug off concerns to focus on the bigger picture.

The shock outcome saw the pound shed as much as three US cents at one point, or close to 2 percent, on fears the political turmoil could delay, and complicate, Brexit talks, which are due to start in 10 days.

United Kingdom votes for hung Parliament, Theresa May's Conservatives single largest party
At that point, polls predicted she would massively increase the slim majority she had inherited from predecessor David Cameron. Prime Minister Theresa May, the head of the Conservative Party, will get the first shot at putting together a government.

The safe-haven Japanese yen edged higher on risk aversion to reach 109.90 per dollar.

Sterling was down 1.6 percent at.2761 after sliding to as low as.2693, down about 2 percent and the weakest since April 18.

That would take the Pound from 1.29 now against the U.S Dollar, all the way back to 2017 lows in the region of 1.20.

It had already slipped overnight when the European Central Bank cut forecasts for inflation and said it had not discussed scaling back its massive bond-buying campaign, sending bond yields to multi-month lows.

Overnight, Wall Street had also seemingly judged that the testimony of former Federal Bureau of Investigation director James Comey was not life-threatening for the administration of President Donald Trump.

"We tend to think that it makes very little sense to expect any substantial impact on the balance of power in the upcoming Brexit negotiations from May's size of majority in parliament", he says.

The Dow rose 0.04 percent, while the S&P 500 gained 0.03 percent and the Nasdaq Composite 0.39 percent.

In commodity markets, spot gold was 0.3 percent lower at $1,274.80 an ounce.

Recommended

  • Trump Says He May Soon Reveal Whether Tapes Exist of Comey Conversations

    Mr Comey was sacked back in May by Trump, who he now claims "defamed" him. "One hundred percent. Mr Trump tweeted: "Despite so many false statements and lies, total and complete vindication".
    Honda to roll out all-new Accord with no V6 option

    Honda to roll out all-new Accord with no V6 option

    A higher-output, 2.0-litre turbo-four will also be on offer, paired with a six-speed manual or a 10-speed automatic transmission. Honda tells us that the next Accord will have a more aggressive appearance, but so far has hidden it from us under camouflage.

    3 reasons to sign LeBron James

    Most points in a half, 86, beating the Philadelphia 76ers' previous high of 81 in the 1982 Finals against the Los Angeles Lakers . However, he returned in 2014 with a sole aim to bring in the National Basketball Association championship to his home region.
  • Gordon Strachan and Scotland have a mountain to climb against England

    But Rodgers had shaped his Celtic side around a spine of Scots, and several of those players were in the form of their lives. It's exciting at the moment, I can't wait to get started, but we still want to cause an upset and get something.
    North Korea says it has tested new anti-ship missile

    North Korea says it has tested new anti-ship missile

    It recommends the central government formulate a plan for evacuating Japanese citizens from South Korea in an emergency. Moon has hinted at an intensive push for easing military tensions and improving inter-Korean relations.
    Police Arrest 6 in Actions Directed against Terror in UK

    Police Arrest 6 in Actions Directed against Terror in UK

    Wearing fake suicide vests, they ran through the busy area randomly stabbing victims who were packed into the busy pubs and bars. A more in-depth profile of the perpetrators has continued to build up as arrests mounted after the weekend's atrocity.
  • Tehran attackers were Iranian Islamic State recruits

    Meanwhile, Iran's interior ministry said Friday that a total of 41 suspects linked to the attacks have been arrested. Iran blamed the Wednesday attacks on Saudi Arabia, though no link has been established.

    Trump slams Qatar for funding terror as Tillerson urges calm

    The U.S.is carrying out military action in the region in its campaign against ISIS from the Al Udeid Air Base in Qatar. Home to some 10,000 troops, Al-Udeid is central to the USA -led fight against the Islamic State in Iraq and Syria.

    As Tillerson calls for calm, Trump calls out Qatar on terror

    Saudi Arabia , Bahrain, Egypt, the UAE and other countries announced they would withdraw diplomatic staff from Qatar . And as I said to all of them, we know you are stronger together.
  • Langley Relay for Life makes tracks

    Langley Relay for Life makes tracks

    Turner was diagnosed with cervical cancer at 24 and did not have many people around to help. Childers said Layne is now a cancer survivor, so they walk to support others.
    43 new designations in Qatar-linked terror list

    43 new designations in Qatar-linked terror list

    But while praising Qatar's emir for working to limit the funding of terror groups, Mr Tillerson said more needed to be done. That official and others say the situation in Qatar has not affected U.S. military operations and security in the country.

    Harry Kane wants an England hat-trick in Scotland showdown

    Five goals in 17 games isn't much to shout about, but one failed Euro campaign comprises a section of those fixtures, bear in mind. "I'm 23 now.

Democratic Unionists in Northern Ireland become election key The party also suffered shock defeats in the south eastern city of Canterbury, which had been a safe Conservative seat since 1918. The DUP's Republican rivals in Northern Ireland, Sinn Fein , increased its number of seats from four to seven.

PM Modi meets China's Jinping at SCO summit; Curfew relaxed in Mandsaur Pakistan is seen by the U.S. as a major anti-terrorism partner as its northern areas are frequented by the Taliban. Jaishankar further said that President Jinping also spoke highly of Indian culture, and lauded Indian films.

Intelligence chiefs won't say if Trump asked them to downplay Russian Federation probe Intelligence chiefs won't say if Trump asked them to downplay Russian Federation  probe On Thursday, Comey will testify before the same Senate committee, where he will undoubtedly be asked some of the same questions. Susan Collins joined her Democratic colleagues taking issue with the lack of answers from Coats and Rogers.

Apple Homepod vs Amazon Echo vs Google Home Apple Homepod vs Amazon Echo vs Google Home The HomePod is a rather sterile competitor; it doesn't have outside developers working way's to make better use of its abilities. It will retail at $349, which is twice the price of the other two with Amazon Echo coming in at $180 and Google Home at $129.

Trump commits to NATO mutual defense after hesitating President Donald Trump speaks during a news conference with Romanian President Klaus Werner Iohannis in the Rose Garden at the White House, Friday, June 9, 2017, in Washington.

Missouri's Blunt questions former FBI Director about private conversation with Trump Missouri's Blunt questions former FBI Director about private conversation with Trump While the president and his lawyer insist James Comey lied under oath, Sen. "He is a good guy I hope you can let this go". Legal experts questioned whether Mr Trump's private encounters with Comey could be considered privileged.

SpaceX launches 1st recycled cargo ship SpaceX launches 1st recycled cargo ship Reusing the rockets saves the company $46.5 million and gets SpaceX closer to its goal of cheaper, more accessible spaceflight. SpaceX launched its first recycled booster two months ago and plans to reuse another booster this coming month.

British PM Theresa May Reaches Deal With Democratic Unionists To Form Govt At that point, polls predicted she would massively increase the slim majority she had inherited from predecessor David Cameron. It was not immediately clear what the DUP's demands might be and one DUP lawmaker suggested support might come vote by vote.

Romney: Clinton told me to take Trump secretary of state job Romney: Clinton told me to take Trump secretary of state job Clinton, who lost to Trump in the election, served as secretary of state under former President Barack Obama from 2009-2013. Last month, Biden said of Clinton's November defeat : "I never thought she was a great candidate".

May Struggles to Hang On as Election Plunges Britain Into Political Chaos They grew their support through social media and rallies, while facing ridicule from the political elite and media outlets. Independent candidates and nominees of other parties have collectively won elections in 23 constituencies.

Qataris on 'terror list' issued by Saudi-bloc The Qatari government has bankrolled the Muslim Brotherhood and affiliated groups with billions of dollars across the Middle East. This vast and strategically important field holds a larger natural gas reserve than all other listed reserves combined.

Blockade against Qatar 'hindering' planning for long-term operation - Pentagon The U.S.is carrying out military action in the region in its campaign against ISIS from the Al Udeid Air Base in Qatar. Qatar's neighbors have also criticized Qatar for allegedly supporting groups like the Muslim Brotherhood and Hamas .

Ostapenko blazes past Bacsinszky to reach French final Bacsinszky will be playing in her second Roland Garros semifinal in the last three years at an event she called "magic" for her. Bacsinszky beat Frenchwoman Kristina Mladenovic , 6-4, 6-4 to reach her second French Open semifinal in three years.

Kansas Bar Shooter Faces Hate Crime Charges Kansas Bar Shooter Faces Hate Crime Charges Kuchibhotla and Madasani had come to the USA from India to study and worked as engineers at GPS-maker Garmin. Purinton has been arrested and charged in the shooting, which being investigated as a hate crime.

James Comey tells Senate committee Trump lied over reasons for his dismissal Many Democrats still blame Comey for Clinton's loss, leading Trump to apparently believe they would applaud him for firing Comey. Trump tweeted in his first comments since Comey appeared before the Senate Intelligence Committee on Thursday.