Fright Night

28 May, 2019

Sam Roberts

There are always lessons to be learned in everything that we do. Some lessons are clearer than others. It just depends on how we choose to learn them.

For example, Theresa May tried to ‘please all of the people, some of the time’ or ‘some of the people, all of the time’. Turns out she was not pleasing anyone….at all and with a crackle in her voice and tears in her eyes, she announced her departure from number 10 in the coming months.

No surprise there, as it was being whispered for months, until it became a full on sound bite given by backbenchers and frontbenchers alike.

This led us scarily into the EU elections and to put it in movie terms, it was a ‘blood bath’.

With Labour taking a page from the ‘guess what’s in my manifesto’ school of politics, the British people once again showed what they thought of the last three years, by teaching Labour and the Conservatives a lesson they should have learned a while back.

In these ‘heady’ and somewhat scary days, you can always count on Nigel Farage to do what he does best, read the public mood (so he calls it), reflect it as policy and capitalise on it.

The Liberal Democrats and The Green Party both profited as a result of the two major parties, believing that continually arguing about ‘soft Brexit’ ‘hard Brexit’ ‘Irish backstops’ ‘ Hard backstops’ ‘no backstops at all’ ‘customs unions’ ‘partial customs unions’ ad nauseam, would not be reflected at the first opportunity the people had to vote and they did just that.

Unfortunately, political arrogance is not just exclusive to British Politics, with the Far Right National Front Party in France winning over 23% of the vote compared to Emmanuel Macrons’ 22%

Where does that leave us? Well we now have lots of ‘hats’ being thrown into the ring for the Tory leadership election. All of which seem ‘to be very clear’ on how to go about Brexit and how to negotiate the best deal for Britain……(that does sound familiar).

Where does that leave the markets?

You might be aware or have heard it said before, that the markets like familiarity. This is true and the markets also know what they do not like. We actually saw a few gains on the currency markets once Theresa May tendered her resignation and on the markets across the board with the FTSE closing up 46.69 that is over half a percent up from the movements it was making at the start of the morning of Mays’ resignation.

However, currency markets are much more sensitive to the ebb and flow of politics which unfortunately seems to be another lesson that our politicians have forgotten. In fact the currency markets are influenced by events in general. Whether they be economic statements or performance data releases or a Prime Minister breaking down at a lectern, as she ‘hands in’ her resignation.

With this in mind there are some data releases this week, one of which is later today as we have the UK Finance Mortgage Approvals Figures.

These are normally an indicator of the ‘health’ of the UK Citizens savings balance and ability to take on debt. Not good reading when put that way but it is a nations ability to take on and manage debt, that partly shows its’ financial strength.

On Friday we have a ‘raft’ of data releases based around mortgage approvals and lending, reflecting consumer confidence in our economy.

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Now surely that is a lesson worth learning.