Markets Overview

The UK will head to the polling stations to vote in the nation’sgeneral election today. Our base case scenario is a Torymajority, but one that consists of less than 370 seats. In thisoutcome, some of the political tail-risk premium unwinds. Itis likely we would witness a brief relief rally in the GBP, butmarkets would likely question the judgement of PM TheresaMay in calling an election without significantly building thegovernment’s majority. Focus will quickly turn to the limitedflexibility and freedom May has in the Brexit negotiations.

    Please refer to Sterling Pound Awaits UK Election for ourscenario analysis and the impact on GBP, as well as keytimings to watch for.