Political Ping Pong, A “Pounding,” And A Market Awaiting Trump

Well, we start in FX land on Monday morning and as has become the norm over the years, cable is moving on political news.

To be sure, the pound could really do without this right now. As I wrote last week in “Dear Sterling: It Would Be Best If You Just Accepted Your Fate,” the best way forward for the currency that Deutsche Bank suggested may soon become “irrelevant” may be for lawmakers to simply roll over and choose the path of least resistance even if the long-term outlook for the British economy after Brexit is indeterminate (at best). Any additional bickering may simply create further FX turmoil.

So even as talk of Scotland leaving the U.K. after the Brexit vote isn’t new, it’s still a huge pain the ass for cable. Here’s Bloomberg:

“The eventuality hasn’t been largely factored in the pound’s value so far,” wrote Ipek Ozkardeskaya, a senior market analyst at London Capital Group Limited. “If Scotland decides to proceed with the second referendum to quit the U.K., there would certainly be another fundamental downshift in the pound’s value, both against the U.S. dollar and the euro.”

Great.

Moving on to France, which has replaced Britain as the source of imminent political turmoil in Europe…

(Bloomberg)

…things calmed down a bit on Monday after Emmanuel Macron secured “his third and fourth endorsements in less than a week Sunday as Socialist lawmaker Christophe Caresche said that he will abandon his party’s nominee in favor of the independent and former European lawmaker Daniel Cohn-Bendit officially declared he will vote for Macron as well,” Bloomberg wrote this morning.

“The Bayrou announcement was decisive,” Emmanuel Riviere, director of polling at Kantar Public France, said in an interview. “He is a personality with significant weight and he has generated momentum for Macron.”