GBP rates seem to be biased towards a Conservative win - TDS

Analysts at TD Securities highlight that the inherent unpredictability of UK politics will keep markets from fully embracing a solid Tory majority before the vote, but a lack of surprises would see confidence grow that Johnson would return as PM.

Key quotes

"Unless something changes abruptly over the next several weeks, this improved outlook provides a crucial underpinning for sentiment in rates and FX markets. That, in our view, suggests GBP should trade with a fairly solid 'floor' under it into election day - at least in most of the scenarios that we outline below."

"As a result, we expect cable to remain largely rangebound ahead of the vote. Within the larger 1.2705/1.3185 range, we think the 1.2770/1.3015 interval should form its core."

"We think that the rates market is less likely than FX markets to read much into these small poll deviations at this stage. GBP rates seem biased towards a Conservative win at these elections."