UK Election: My macro presentation for this week - UK election - the uninteded consequences

Dear All,

 

Please find my almost final version of the UK election presentation: (A few chart will be updated pre the speaking engagement in London on Wednesday)

 

The main points:

 

Conservatives and PM May have executed a terrible campaign - she has done ALL the mistakes of Clinton and the establishment:

 

·        Safe pair of hands

·        Not committing to anything 

·        Talking about energy regulation

·        No committing to tax freeze

 

On the other hand Labor has been able to reframe

 

·        The Tories question: What kind of Brexit do you want?  To what kind of country do you want?

·        Classic tax & spend, but this time the classic middle class is safe, while "rich" & "corporates" needs to pay more….

·        Wild promises free lunch and education, 250 billion GBP infrastructure program

·        No commitment on Brexit

·        Corbyn policy is economically naïve but he is getting the young voters.

 

 

My final call:

 

·        The election will end with Tories having EXACTLY the same majority as now - hence a lost election and a muddy BREXIT mandate.

·        Prime Minister May is the de facto loser independently of the final results as her "management" has been poor and rudderless leaving more doubt than the clear vision needed – hence the title: Unintended consequences (May getting weaker mandate and populous empty promises still attracting voters.)

 

 

Market calls:

 

If correct in my call… GBPUSD should correct 1-2% but overall the next major level is 1.3500 (& 1.4000 in 2018 based on credit impulse, weak dollar and terms of trade improvement & the better trade is probably to be long EURGBP towards parity (EU growth > UK growth, EUR undervalued, EU Current Account surplus vs. UK Current Account)

 

Steen Jakobsen

 

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

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