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| Pound hits 31-month high as Conservatives hold election lead - business live | Pound hits 31-month high as Conservatives hold election lead - business live |
| (32 minutes later) | |
| Rolling coverage of the latest economic and financial news, as the Conservative party extends its lead over Labour | Rolling coverage of the latest economic and financial news, as the Conservative party extends its lead over Labour |
| Reuters points out that Paul Volcker was no fan of the rise of the super-rich: | |
| They also talk about the ‘mystique’ that underpinned his work at the Fed, as he hiked interest rates painfully high: | |
| Economists, investors and journalists are offering their appreciations for Paul Volcker’s work: | Economists, investors and journalists are offering their appreciations for Paul Volcker’s work: |
| He wasn’t infallible, though.... | He wasn’t infallible, though.... |
| Newsflash: Paul Volcker, who ran America’s Federal Reserve through much of the 1980s battle against inflation, has died at the age of 92, according to the New York Times. | Newsflash: Paul Volcker, who ran America’s Federal Reserve through much of the 1980s battle against inflation, has died at the age of 92, according to the New York Times. |
| Volcker was one of the most important central bankers to have steered monetary policy in recent decades. | Volcker was one of the most important central bankers to have steered monetary policy in recent decades. |
| He ran the Fed from 1979 to 1987, first under Jimmy Carter and then Ronald Reagan’s presidency - a time of surging inflation. Volcker responded with sharply higher interest rates, to drive inflationary pressures down. | |
| The NYT says: | The NYT says: |
| The recent rally in the pound is a blow to any hedge funds who have bet against the currency. | The recent rally in the pound is a blow to any hedge funds who have bet against the currency. |
| Speculators have reduced their net short positions on the pound vs the US dollar to $2.44bn in the last week, Reuters is reporting. That’s down from a peak of $7.81bn earlier this year. | Speculators have reduced their net short positions on the pound vs the US dollar to $2.44bn in the last week, Reuters is reporting. That’s down from a peak of $7.81bn earlier this year. |
| Jordan Rochester, Nomura’s currency strategist, has predicted that a Tory triumph could push the pound to $1.35 - not seen since May 2018. | Jordan Rochester, Nomura’s currency strategist, has predicted that a Tory triumph could push the pound to $1.35 - not seen since May 2018. |
| Rochester says: | Rochester says: |
| The FT has spotted that the cost of insuring against a tumble in the value of the pound has risen. | The FT has spotted that the cost of insuring against a tumble in the value of the pound has risen. |
| That suggests some investors are nervous about the result of this week’s election, as a hung parliament would probably knock sterling lower. | That suggests some investors are nervous about the result of this week’s election, as a hung parliament would probably knock sterling lower. |
| Rupert Thompson, Head of Research at Kingswood, says smaller UK companies could see their shares rally after a Tory win -- which looks probable, but not certain. | Rupert Thompson, Head of Research at Kingswood, says smaller UK companies could see their shares rally after a Tory win -- which looks probable, but not certain. |
| In other news, the battle for takeaway company Just Eat rumbles on. | In other news, the battle for takeaway company Just Eat rumbles on. |
| Amsterdam-listed Prosus has hiked its offer for the FTSE 100 firm, to over £5bn, which rival bidder Takeaway.com has dismissed as ‘derisory’. Here’s the latest: | Amsterdam-listed Prosus has hiked its offer for the FTSE 100 firm, to over £5bn, which rival bidder Takeaway.com has dismissed as ‘derisory’. Here’s the latest: |
| Gambling site Betfair reports that the odds of a Conservative win have narrowed again today, to its lowest levels since 2017. | Gambling site Betfair reports that the odds of a Conservative win have narrowed again today, to its lowest levels since 2017. |
| As chart shows, it’s now a 79% chance (based on wagers) while a hung parliament is roughly 19%. | As chart shows, it’s now a 79% chance (based on wagers) while a hung parliament is roughly 19%. |
| Betfair spokesperson, Katie Baylis explains: | Betfair spokesperson, Katie Baylis explains: |
| Labour’s shadow chancellor, John McDonnell, has denied that the pound would plunge if his party forms the next government. | Labour’s shadow chancellor, John McDonnell, has denied that the pound would plunge if his party forms the next government. |
| Presenting his fiscal plans in London, McDonnell is asked what his plan is for a sterling crisis (something he said Labour was planning for back in 2017). | Presenting his fiscal plans in London, McDonnell is asked what his plan is for a sterling crisis (something he said Labour was planning for back in 2017). |
| McDonnell insists that there won’t be a run on the pound, claiming: | McDonnell insists that there won’t be a run on the pound, claiming: |
| McDonnell adds that the markets realised that Boris Johnson’s promises are neither “truth nor implementable”. | McDonnell adds that the markets realised that Boris Johnson’s promises are neither “truth nor implementable”. |
| They are worried about instability, and very fearful about dropping off the edge within a year with a cliff-edge Brexit, he adds. | They are worried about instability, and very fearful about dropping off the edge within a year with a cliff-edge Brexit, he adds. |
| McDonnell also invites us to “explore the recent history of the pound under the Conservative government” [reminder: it is still around 10% lower than before the EU referendum]. | McDonnell also invites us to “explore the recent history of the pound under the Conservative government” [reminder: it is still around 10% lower than before the EU referendum]. |
| Back to the pound.... and Adam Cole of Royal Bank of Canada points out that sterling has already largely priced in a Tory victory. | Back to the pound.... and Adam Cole of Royal Bank of Canada points out that sterling has already largely priced in a Tory victory. |
| That means there might not be much of a rally if Johnson wins a majority....and quite a tumble if he doesn’t. | That means there might not be much of a rally if Johnson wins a majority....and quite a tumble if he doesn’t. |
| Cole writes: | Cole writes: |
| If the UK bookies’ prices are a reasonable guide to market expectations for Thursday’s election, it is hard to see much more upside for GBP on the outcome. Betfair’s prices now imply almost an 80% probability of a Conservative majority government and that rises to 85% including a Conservative minority. At 15%, the probability of a Labour-led government is its lowest since the campaign began | If the UK bookies’ prices are a reasonable guide to market expectations for Thursday’s election, it is hard to see much more upside for GBP on the outcome. Betfair’s prices now imply almost an 80% probability of a Conservative majority government and that rises to 85% including a Conservative minority. At 15%, the probability of a Labour-led government is its lowest since the campaign began |
| Taken together, the weekend’s polls suggest voting intentions have stabilised, with the Conservatives 10% points ahead on the raw data. As the second chart shows, the steady rise in Labour’s share appears to have stalled and their performance is now lagging, relative to the run up to the 2017 election. There is no “blackout” period in the UK, aside from polling day itself, and polls will continue to be published up to Wednesday night. YouGov will update their MRP model at 10:00 GMT tomorrow. | Taken together, the weekend’s polls suggest voting intentions have stabilised, with the Conservatives 10% points ahead on the raw data. As the second chart shows, the steady rise in Labour’s share appears to have stalled and their performance is now lagging, relative to the run up to the 2017 election. There is no “blackout” period in the UK, aside from polling day itself, and polls will continue to be published up to Wednesday night. YouGov will update their MRP model at 10:00 GMT tomorrow. |
| Despite the confidence with which markets predict a Conservative victory, there are still several major uncertainties – turnout (particularly amongst younger voters), potential tactical voting and the large proportion of undecided voters that the polls still show. | Despite the confidence with which markets predict a Conservative victory, there are still several major uncertainties – turnout (particularly amongst younger voters), potential tactical voting and the large proportion of undecided voters that the polls still show. |
| In another fillip for the eurozone economy, Germany has managed to grow its exports. | In another fillip for the eurozone economy, Germany has managed to grow its exports. |
| German exports rose by 1.2% in October, beating gloomy forecasts of a 0.7% decline. | German exports rose by 1.2% in October, beating gloomy forecasts of a 0.7% decline. |
| Sales to non-EU countries jumped by 4.5%, suggesting a pick-up in the global economy may be helping the euro area. | Sales to non-EU countries jumped by 4.5%, suggesting a pick-up in the global economy may be helping the euro area. |
| Economists are encouraged by the pick-up in eurozone confidence this month: | Economists are encouraged by the pick-up in eurozone confidence this month: |