A disastrous election night for the UK Conservative party saw sterling slip to $1.266 (8am), down -2.20%. Earlier the pound-euro pair was down -1.46%. Elsewhere markets were relatively stable with the Nikkei 225 climbing almost 0.50% to 20,005.
“This is [sic] result markets feared,” Dominic Rossi from Fidelity told the BBC. “Markets were wrongly positioned, and international confidence in UK will suffer."While the pound has fallen significantly it is still relatively stable given the dramatic political backdrop."
But investors prize stability and confidence above just about everything else. Quarter-on-quarter GDP UK growth at 0.2% is already amongst the weakest in the G7. Weaker, even, than Greece’s 0.4% growth.
Deutsche Bank says however that the medium term looks relatively encouraging, should a softer Brexit materialise. Prepare for more shock waves as the news is further digested.
- UK FTSE 100 7,449.98 -0.38%
- Dow Jones 21,182.53 +0.04%
- S&P 500 2,433.79 +0.03%
- Nasdaq 6,321.76 +0.39%
- DAX 12,713.58 +0.32%
- CAC 40 5,264.24 -0.02%
- Nikkei 225 20,013.26 +0.52%
- Gold 1,276.60 -0.23%
- Oil WTI 45.57 -0.15%
Markets set for volatility
“Brexit talks are now likely to be even more unsettling for markets, and the prospect of another election raises the risk of a delay, potentially leaving the UK without a negotiated exit settlement,” Mark Haefele, from UBS Wealth Management told the Independent.
Despite the political UK impact gold is currently at 1,273.32, down -0.23% though the gold price in sterling saw a surge. However any pressure on gold looks increasingly US-focused while ex FBI boss James Comey’s Congressional appearance causes uncertainty for the Trump administration.
Sky News has reported that Qatar's Al Faisal and Interritus of Switzerland are discussing a takeover of the struggling Co-op Bank with the Co-op bank’s board.
Al Faisal, an investment group, has little exposure to UK financial services with an education and logistics background. However its financial services Qatar arm does have trading and brokerage services.
“A source close to the Co-op Bank,” reported Sky, “said that Interritus and Al Faisal were prepared to take a long-term approach to reviving the fortunes of the Co-op Bank, and that it was attracted to its ethical credentials.”
Breaking news: Japan's Softbank has bought robot-maker Boston Dynamics from Google's Alphabet. Softbank shares have surged more than 6%.