With momentum being very much against the Conservatives, the pound may remain very vulnerable as we near the 8 June vote. The uncertainty that a hung parliament would bring is clearly far from ideal when the country is due to begin Brexit negotiations only 11 days later and this may be contributing to the moves in the currency.
Equity markets in Europe are trading a little mixed on Tuesday, offering little direction for US futures ahead of the open on Wall Street, while commodities are broadly in the green as oil looks to extend its winning run to five straight sessions. There have been some interesting moves in currency markets this morning, with sterling being particularly volatile on the back of some interesting inflation data.
The markets relinquished short-term gains on Friday following the soft retail sales and inflation data and should be poised to edge lower this afternoon as investors re-evaluate the likelihood of an interest rate increase in June. With an air of anxiety suffocating participants who seek risk, and soft economic data from the US and China weighing on sentiment, the “Sell in May and go away” strategy may become a popular choice.