London Markets: Sterling rises as YouGov poll shows Conservatives will win big majority in coming election

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The British pound strengthened Thursday after a poll indicated Prime Minister Boris Johnson’s Conservative Party will win the Dec. 12 general election with a comfortable majority.

The pound GBPUSD, +0.1858%  rose 0.2% to $1.2945 from a level of $1.2920 late Wednesday in New York. FTSE 100 futures meanwhile, indicated a weaker start for London stocks as China reacted angrily to news President Donald Trump signed a bill supporting Hong Kong protesters. That has stoked some concerns that trade negotiations could become more complicated.

A Thanksgiving holiday in the U.S. is expected to keep trading volumes thin for financial markets.

Read: When do markets close for Thanksgiving?

A YouGov poll for the Times predicted the Conservatives will win 359 seats, Labour 211, the Scottish National Party 43 and the Liberal Democrats 13 if the election were held now. The result would mean a 68-seat majority for Johnson. The poll indicates the second-worst postwar loss for the Labour Party.

“If it turns out to be right, PM Boris Johnson will be able to pass his Brexit deal before Christmas without too many problems. Friday 20 December has circulated as a potential voting day,” Mikael Olai Milhøj, senior analyst at Danske Bank, told clients in a note.

“As we do not have much else to rely on, a Conservative majority is now our base case,” he said, adding that they expect Johnson to deliver Brexit by Jan. 31.

Danske Bank

Base case: Conservatives win

In 2017, this same YouGov poll was a bit of an “outlier,” yet proved to be remarkably accurate, Michael Hewson, chief market analyst at CMC Markets, told clients in a note.

“It predicted a hung parliament when no other poll was,” he added. “It is however only one poll, and when one looks at the internals of the data it wouldn’t take that much of a shift in some key marginals for that majority to come down sharply.”

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