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Market Recap – UK elections-Christine Lagarde Press Conference

Thursday, December 12, 2019 10:31 AM GMT

The Tories Brexitiers, the group that supported the leadership of Cameron on the premise that he would deliver them a Brexit referendum, are about to win the majority of the UK Parliament on today’s general elections. It’s been three years of significant political uncertainty, with falling business investments and consecutive postponing of huge projects. On 22 October 2019, this group managed to have their Brexit plan approved in principal by the UK Parliament. Now that they will most likely enjoy the majority in the new parliament,  it remains to be seen whether the three years of prolonged uncertainty is worth the UK’ s ability to start competitive regulation activity. The upcoming months will certainly be painted with disappointing macro releases on the one hand, and on the other hand wishful consecutive new deals of the UK with the rest of the world. A probable short-term scenario is a GBP spike once the results of the elections certify the Tories majority, and a following selling of this fact up until the end of the year.

Despite the fact that Jerome Powell clarified that “dots are not in the conversation, when the FED’s outlook changes”, yesterday’s dots reveille that the current Federal Fund rates range (1.50~1.75%) is the rate floor.

Today will be the first press conference of Christine Lagarde as the head of the ECB. No policy change is expected by financial markets participants , but a further 10bps cut of the deposit rate cannot be entirely excluded.  A possible rewarding way to trade the press conference is to counter-trade any spikes of the EUR, caused by a probable misunderstanding of her replies during the Q&A session.

Macro releases: Other than the ECB meeting and the monetary meeting of the Central Bank of Switzerland, no additional significant readings are inlcuded in today’s economic calendar

Disclaimer

The views expressed do not constitute investment or any other advice /recommendation /suggestion and are subject to change. Reliance upon information in this material is at the sole discretion of the reader. Opinions expressed in the report do not represent the opinion of ZuluTrade Social Trading Platform and do not constitute an offer or invitation to anyone to invest or trade.

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