GBPUSD – Will Boris Get His Vote?

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Market Drivers October 29, 2019
Markets flat
Kiwi sees a whipsaw
Nikkei 0.47% Dax -0.18%
UST 10Y 1.83%
Oil $55/bbl
Gold $1494/oz
BTCUSD $9448

Europe and Asia:
No Data

North America:
USD Consumer Confidence 10:00

Its been a quiet lackluster night of trade in FX with most pairs hugging narrow 20 point ranges as traders awaited the election vote in UK Parliament and the FOMC meeting tomorrow.

In Asia, the kiwi saw a bit of turbulence first rising on news that the New Zealand superannuation fund may direct more of its investments internally which was positive for the currency, then quickly falling on news of possible concerns that S&P would remove its credit rating. In the end, the pair traded at .6350 after rising as high as .6375 in Asia session trade.

Cable was wobbly as well with traders keeping a keen eye on the UK Parliament vote for an early election. So far PM Johnson has failed in his every attempt to force an early election, but this simple bill with just a date holds the most promise.

Trading in sterling remains volatile, but if the UK Parliament okays the election vote the pairs could see a relief bounce to 1.2900. The conventional wisdom is that current polling favors a Tory majority which would help solidify the Brexit deal and provide investors with a resolution to the matter. However, UK elections can be incredibly finicky with voters often defying the polls. If the end result of Mr. Johnson’s gambit is that the UK has a hung Parliament the Brexit crisis could get worse, not better with the January 31st deadline bearing on the government. For now, the market only cares about the election vote and if Mr. Johnson gets his wish the pair should bounce.

Boris Schlossberg
Managing Director

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