Change In Leader to Be Announced Shortly
UK citizens and traders alike are bracing for today’s announcement regarding the Conservative Party leadership contest. The contest, between Rishi Sunak and Liz Truss, has been a largely dull affair with polling consistently showing Truss ahead of Sunak from the start. Consequently, the expectation today is that Truss will be announced as the new head of the Tory party and so the new UK PM. With that result already well expected, only a surprise victory by Sunak is likely to cause much friction in markets.
The FTSE has been under heavy selling pressure ahead of the decision, as has GBP. Critics across the political divide have raised concerns over Truss’ spending and tax plans, as well as plans to review the operations of the BOE. While Truss is looking to buffer the economy via tax cuts and increased spending, there are fears that these actions will simply feed into the current inflationary spiral gripping the UK, forcing the BOE to tighten more aggressively, dampening growth prospects through the rest of the year and into next.
Technical Views
FTSE
Following the heavy sell off from the 7558.7 highs, the FTSE has since stabilised around the 7213.9 level. With both MACD and RSI still bearish, there are risks of further losses towards the 6994.2 level unless bulls can get price quickly back above the 7362.6 level near-term.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.