“The Election Is Boris Johnson’s To Lose” – Pound Hits 7-Month High As Traders Bet On Tory Victory

Prime Minister Boris Johnson is riding high on Wednesday following a meeting with President Trump, one of his closest political allies.

Enjoyed my meeting with Prime Minister @BorisJohnson of the United Kingdom at @10DowningStreet last night. Talked about numerous subjects including @NATO and Trade.

— Donald J. Trump (@realDonaldTrump) December 4, 2019

With UK election polls showing the Tories with a sizable lead over Labour, an analyst at UBS quipped that the UK snap election is now “Boris Johnson’s to lose,” according to the FT.

Though many of Johnson’s political opponents have spent the last couple of weeks complaining about the corrupting influence of ‘YouGov’, which many claim is biased in favor of the Tories, it appears that the Conservatives’ lead is being reflected across polling companies.

A YouGov poll released last night showed both the Tories and Labour down one point at 42% and 33%, though it wasn’t the only poll to show a sizable conservative lead.

Not just me old fruit…
Current Tory Lead by Pollster:

Opinium: +15
DeltaPoll: +13
Kantar: +11
Survation: +11
ComRes: +10
YouGov: +9
Panelbase: +8
ICM: +7
BMG: +6

Polls from 23rd November or later only.

— Freddie Scovell Esq. (@FreddieScovell) December 4, 2019

These numbers drove cable to its highest level since May, with Neil Jones, the head of FX sales at Mizuho Bank, attributing the move to traders’ cutting back their sterling short positions and hedges as a Tory victory looks increasingly likely.

In a continuation of its gains from Tuesday’s session, the pound broke above $1.30 Wednesday morning.

According to Bloomberg and the FT, investors see a decisive conservative majority as the best possible outcome for the snap vote on Dec. 12 because it would enable Johnson to push his Brexit deal through Parliament before the January deadline, allowing the UK to finally begin is split from the EU. To be sure, after the deadline, the negotiations over the substance of a future UK-EU trading relationship will begin, which is where some see problems. Many analysts suspect that Johnson’s pledge not to extend the Brexit transition period beyond the end of next year has already set up the UK for another round of gridlock and last-minute extensions.