December 13, 2019

The U.K. will leave the EU on January 31, leaving the economy vulnerable to the shape and content of a future trade deal

The British pound lost steam on Friday morning after topping $1.35 in the aftermath of the commanding Conservative victory in the general election. The pound fell back to $1.3370 from as high as $1.3515, though that's still far above the $1.3164 level from Thursday. The pound retreated to 1.1970 euros from 1.2082 euros, though that's above the 1.1826 euros level from Thursday.

Mercurial in his politics and personal life, Boris Johnson’s union with sterling is ever closer. It rallied 2 per cent on his election victory. Sterling is the symbol of the UK Independence Party, whose thunder Mr Johnson has stolen.

FT subscribers can click here to receive Market Forces every day by email. Markets have enjoyed a victory lap in the wake of positive developments over trade and Brexit. A “skinny” trade deal that bestows a temporary truce between the two big powers ...

Tom Stevenson, investment director of Fidelity International, said Prime Minister Boris Johnson is now "unworried by the Brexiteer wing" after the commanding Conservative victory in the general election. "The pound reacted so positively...

The benchmark jumped as much as 0.5 per cent to a record intraday high as Chinese trade negotiators conducted a press conference in Beijing, revealing the developments they said were designed to boost confidence in global markets. The Nasdaq Composite...

Goldman Sachs strategists reiterated a call on Friday to go long U.K. domestic stocks, particularly homebuilders and domestic banks. "Clarity on the UK's terms of exit from the EU should unlock pent-up business investment; the reversal of a decade of fiscal consolidation should provide a fillip to domestic demand; and a pick-up in global growth should underpin a recovery in net exports," said analysts Zach Pandl, Sharon Bell and George Cole. They estimated that each additional 1 percentage point increase in U.K. GDP growth would add to earnings per share growth about 3 percentage points to FTSE 100 , 5 percentage points to FTSE 250 and 11 percentage points to domestically-oriented U.K. stocks.

An economist said the Conservative victory in the general election will give the British economy some "breathing space" to recover after not growing at all in the three months to October. "Business confidence should recover, now that a no-deal Brexit isn't a risk in January 2020 and the outlook for domestic policy over the next five years is relatively clear," said Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics. "Many firms will be able to invest, knowing that corporation tax likely won't rise, wages won't increase rapidly and Labour's socialist agenda will not be implemented soon." The rise in sterling should help keep CPI below the Bank of England's 2% target, he added.

Investors poured into companies that generate most of their revenue in Britain on Friday, after the Conservatives secured an easy victory in the general election.

Home builders and banks in the U.K. rallied on Friday in relief at a commanding Conservative victory in the general election.