Shaken last Friday by an appalling pair of PMIs, sterling got its mojo back on Monday after a monthly poll of polls put the Tories on course for an 80 seat majority.
Though you’d think any kind of Brexit would spook the pound, at this point it just wants it over and done with. That means the ostensible clarity of the Conservative position – alongside the general right-leaning tendencies of the market – is immensely appealing to sterling, hence the big gains seen following the latest projections.
Currently Spreadex has Conservative seats at 345-535, with Labour at 201-209, the SNP at 44-47 and the Lib Dems at 24-28.
Against the dollar it rose 0.6%, sending cable back above $1.2905, while against the euro it climbed the same amount, leaving it just short of €1.171.
Normally such a surge from sterling would give the FTSE an immediate migraine. However, the strength of positive sentiment following the Global Times’ claim that the US and China are ‘very close’ to a deal – alongside the pro-democracy results in Hong Kong and Beijing’s announcement of Washington-appeasing IP protections – meant the UK index spent Monday with a smile on its face.
The FTSE added 0.8%, lifting it within 10 points of 7400. That puts it ahead of the 0.6% and 0.7% gains seen by the DAX and CAC respectively, as well as the half a percent climb managed by the Dow Jones, one that send the US index back across 28000.