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Goldman: No Big Fireworks For The Fourth Of July

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Goldman Sachs do not expect “the UK general election to have a major influence on sterling in the short term.”

  • “Labour leads in the polling averages by about 20ppts, and fiscal space will be relatively limited in the next Autumn Statement, so the space for policy uncertainty in the near term is relatively limited as well.”
  • “Political winds seem to favour somewhat tighter ties with the European Union - in stark contrast to the Brexit focus of the last few election cycles - which should help support the pound on the margin, but again is not new news.”
  • “More importantly in the short term, stronger services inflation in the critical April report had already shifted expectations for the BoE cutting cycle.”
  • “This reinforces our view that monetary policy will at least not be a headwind for the currency right now, and we still think GBP will be more sensitive to global risk sentiment.”
  • “With domestic catalysts now better defined, firmer inflation data should keep GBP out of the “most divergent” camp (like SEK and CAD), even though cable will not remain unaffected by a USD that drifts back to the top of its range.”
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Goldman Sachs do not expect “the UK general election to have a major influence on sterling in the short term.”

  • “Labour leads in the polling averages by about 20ppts, and fiscal space will be relatively limited in the next Autumn Statement, so the space for policy uncertainty in the near term is relatively limited as well.”
  • “Political winds seem to favour somewhat tighter ties with the European Union - in stark contrast to the Brexit focus of the last few election cycles - which should help support the pound on the margin, but again is not new news.”
  • “More importantly in the short term, stronger services inflation in the critical April report had already shifted expectations for the BoE cutting cycle.”
  • “This reinforces our view that monetary policy will at least not be a headwind for the currency right now, and we still think GBP will be more sensitive to global risk sentiment.”
  • “With domestic catalysts now better defined, firmer inflation data should keep GBP out of the “most divergent” camp (like SEK and CAD), even though cable will not remain unaffected by a USD that drifts back to the top of its range.”