Good morning,
Despite the events in London Bridge on Saturday night sterling is as solid as London is this morning. The general election due this Thursday will still go ahead and the campaigns that were briefly suspended yesterday will swing back into action this morning. With those campaigns restarting we are also likely to see opinion polls published again and sterling will once again takes its cues from the expected lead of the Conservative party. Saturday’s Survation poll had the lead down to 1 percentage point – Conservatives 40, Labour 39 – but this poll is relying on 80% of 18-24yr olds voting on Thursday; their turnout typically only reaches around 40%. Elsewhere the average of that plus polls from Opinium, Comres, ORB, Yougov and ICM was a 7 point lead for the Conservative party.
Sterling also has its PMI from the services sector due this morning which will likely show a moderation of the Easter-led strength in the industry and further pressures around price and margin. Similar numbers are due from France, Germany, the Eurozone and the US throughout the day.
Oil is up and bouncing around following news that Saudi Arabia, the UAE, Bahrain and Egypt have all cut diplomatic ties with Qatar and have asked Qatari citizens to leave their countries in the next week or so. Oil has been falling since the botched supply cut by OPEC and its weakness was extended by Trump’s dismissal of the Paris Accords last week but commodity currencies such as the NOK, CAD, ZAR and AUD all stand to benefit should the contretemps around the Strait of Hormuz continue and choke supply further.