What you need to know. - Western Union Business Solutions
Transcription
What you need to know. - Western Union Business Solutions
What you need to know. Why is this election the most uncertain in decades? Why this election matters more The UK is experiencing a significant shift from a 2-party system, consisting of the Conservatives and Labour, to a multiparty system. Outcome 1 What are the potential outcomes? Conservative and Lib Dems Coalition Outcome 3 Labour coalition with either the SNP or the Lib Dems The changes which markets are speculating about These are potential scenarios based on recent ‘poll-of-polls’ indicating that there will be another hung parliament Should you expect a significant market reaction? How previous ‘highly uncertain’ elections impacted GBP UK elections in both February 1974 and May 2010 resulted in hung parliaments.! February 1974 What market risks are related to each possible scenario? Why investors are on high alert Who are the parties changing the political landscape? Conservatives minority government Outcome 2 EU Referendum (potential ‘Brexit’) Lengthy multi-party negotiations EU Referendum (potential ‘Brexit’) Each scenario is expected to affect how the government influences the UK economy Change in economic policy, spending and taxes Potential for another Scottish Referendum Between January and March GBP/USD fluctuated by 10.5%. May 2010 Between April 26th and May 18th GBP/USD fell by 8%. Between May 18th and August 1st GBP/USD climbed by 11%. On May 7th GBP/EUR fell by almost 5 cents (4.3%) in one day. SNP What impact could each outcome have on GBP? GBP Depreciates? GBP Appreciates? GBP Uncertainty Rises? Will another Cons/Lib Dems coalition be seen as ‘business as usual’ with continued UK economic growth? Will FX volatility jump as markets reassess the outlook for the UK economy? Will GBP be subject to further economic speculation? How this election may affect your currency position Lib Dems UKIP Page 1 of 2 pages A hypothetical guide to how currency markets could react to each potential outcome A multi-party government could take weeks to form. Could this leave the pound vulnerable to speculative trading? My biggest concern would be lengthy multi-party negotiations after May 7th. In that scenario, and based on previous political experiences, we can be confident in seeing aggressive fluctuations in the pound’s value. Nawaz Ali, UK Market Analyst More Information Overleaf What you need to know. What are the market predictions this time? Predictions from leading analysts are divided on where GBP will be trading by September 2015. The latest FX forecasts from the experts GBP/USD Predictions2 1.500 1.600 1.300 1.6000 1.5800 1.5500 HIGH 1.4900 1.4000 APR 2015 LOW 1.3800 JUN 2015 1.3500 SEP 2015 MAR 2016 This is how we are planning to guide you through 1.5645 1.4999 1.5300 HIGH 1.500 1. Extended Opening Hours On both May 7th and 8th our phone lines will be open from 7am until 7pm. 2. Breaking News Service 1.400 1.400 What we are doing now to help you GBP/EUR Predictions2 1.700 1.600 How are we preparing for this critical period? Over the election period we will keep you updated on any high-impact market developments via e-mail. 1.3900 1.3118 1.300 1.3113 LOW 1.2783 1.200 APR 2015 JUN 2015 SEP 2015 MAR 2016 3. Credit Facility Our finance specialists are on standby to assist you with any questions about your credit facility with us. 4. Risk Management Strategy Our team has already prepared risk reducing strategies to share with you. UK Election & Key Economic Events Calendar The dates that could have a high impact on currencies 3 One opinion poll had a significant impact on GBP before the 2014 Scottish Referendum. These could be the key dates to watch this time. Televised Election Event UK Election Update Poll Results Televised Expected Election Event 21 APR 22 APR 23 APR UK BOE Meeting Minutes 24 APR 25 APR 26 APR Euro Zone Meeting (Greece) German IFO Business Index Economic Event Risk UK General Election Poll Results Expected 7 MAY Election Result Expected US Interest Rate Decision US Q1 GDP Result US Non-farm Payrolls German Industrial Orders Actions that will help us support you Understand what payments you need to make or receive 27 28 29 30 1 2 3 4 5 6 7 8 9 10 11 12 APR APR APR APR MAY MAY MAY MAY MAY MAY MAY MAY MAY MAY MAY MAY Euro Zone Inflation How could you be preparing for this critical period? UK BOE Interest Rate Decision UK Q1 GDP Result Do you have an overview of your future foreign cash flow? Your Cash Management Platform or your Dedicated Dealer can help you do this quickly with more confidence. For further information on how we can support you and develop a strategy that will help you plan ahead, contact us now: 0800 096 1225 [email protected] 1 Source: Reuters, WUBS. 2 Source: Reuters, WUBS – The Reuters FX Poll is published by Reuters each month. About 50-60 global institutions including leading investment banks contribute with their predictions. 3 Source: Reuters, WUBS. © 2015 Western Union Holdings, Inc. All rights reserved. Western Union Business Solutions is a division of The Western Union Company. Services in the UK are provided by Custom House Financial (UK) Limited (which does business under the trade name of Western Union Business Solutions) or Western Union Business Solutions (UK) Limited (collectively referred to as “WUBS” or “Western Union Business Solutions”). Custom House Financial (UK) Limited (registered in England, Company Number 04380026, Registered Office Address: 12 Appold Street, London EC2A 2AW) is authorised by the Financial Conduct Authority under the Payment Services Regulations 2009 (Register Reference: 517165) for the provision of payment services and is registered as an MSB with HM Revenue & Customs (Registered No: 12140130). Western Union Business Solutions (UK) Limited (registered in England, Company Number 02854737, Registered Office Address: 12 Appold Street, London EC2A 2AW) is authorised by the Financial Conduct Authority under the Payment Services Regulations 2009 (Register Reference: 536611) for the provision of payment services and is registered as an MSB with HM Revenue & Customs (Registered No: 12122416). 2 This document does not constitute financial advice or a financial recommendation. The information set out in this document has been prepared without taking into account your objectives, financial situation or needs. This document has been prepared solely for informational purposes and does not in any way create any binding obligations on either party. Relations between you and Western Union Business Solutions (UK) Ltd shall be governed by the applicable terms and conditions. No representations, warranties or conditions of any kind, express or implied, are made in this document.