Weekly Outlook 9th - 13th December
Good afternoon eveyone,
With only a few days to go before the UK general election the polls are still pointing to the likelihood of a Conservative majority. However, there are still doubts over the reliability of most of the polls. The MRP poll from YouGov seemed to more accurately predict the result in the 2017 election than any of its competitors, which is why the results of the same survey a few weeks ago caused big movements when it forecast a Conservative majority. However, that was relatively early in the campaign, which means tomorrow night’s update from YouGov will be watched closely to see whether it shows any change in voting intentions.
Elsewhere, ongoing trade tensions between the US and China remain a key focus for global markets. Conflicting indications on the likelihood of a near-term deal led to USD weakness against Sterling last week. This week may see even more volatility as investors look for a deal to be done before 15th December when the US is set to raise tariffs on a range of imports from China.
Later this week both the US and Eurozone central banks will hold their last policy meetings of the year with neither expected to move interest rates. Indeed, in the case of the US, Friday’s much stronger-than-expected employment report has boosted the odds that after three recent cuts, rates will now be left unchanged for many months. Any indications of future policy decisions will cause movements in USD exchange rates.