Date : 24th October 2019. Sterling, Extension and Election Polls 24th October 2019. Everyone concerned is presently waiting on the EU to grant the UK an extension in the Brexit deadline from October 31. The Irish PM along with some EU heavy weights have made public their backing for an extension, out to January 31, though this will have to be agreed by all of the EU27 member states. The widespread expectation is that they will, which is why Sterling is not crashing presently, as a refusal would risk a no-deal Brexit scenario at month end. UK PM Johnson met with opposition leader Corbyn earlier to discuss a timetable for ratifying the Brexit deal, with Parliament having voted to reject the government’s program bill to fast-track the legislative process. They failed to reach an agreement. Johnson has stated that the government can’t go on and that he will call for a general election in the event EU permits a 3-month extension. He needs 2/3 of MPs to support this, being an out-of-cycle election. As for Labour, some political pundits are surprised that the party isn’t pushing for a second referendum on EU membership rather than a general election given its poor standing in polling. Overall, the most likely scenario from here is that the EU formally permits an extension and a UK general election is staged by early December. In the currency market, Cable has recouped above 1.2900 level since New York session yesterday. According to ING, bulls could hope that Cable is going to make a massive rally through to 1.40. “We see a Cable move to 1.40 being too much of a stretch this year – and if it were to happen it would probably involve us and the market massively under-estimating the size of the squeeze in short UK positions – those positions including equities, where fund managers have been underweight UK equities since 2014.” UK polling ahead of likely general election. Politico’s poll of polls shows PM Johnson’s Conservative Party to be out in front with 35% support. The Brexit Party, which favours nothing but a “clean” — aka “no deal” (given the Northern Ireland border problem) — Brexit, are running with 11% support. Should the two form a coalition, their combined support is 46%.The Labour Party has 25% support. The Liberal Democrats are in third spot with 18% support — a combined support with Labour, of 43% in a hypothetical coalition, less than the Tory-Brexit total. As for other parties, the Green Party has 5% and Scotland’s SNP has 3%. It should be stressed that the Conservatives have been ruling out forming an alliance or coalition with the Brexit Party, fearing it would cost the votes of the not-so-hardline Brexit supporters, while the Liberal Democrats have also been saying that they couldn’t contemplate a coalition with Labour while Jeremy Corbyn is their leader, who is unpopular and widely blamed for the historical low-polling that his party has been seeing, and who would put off politically homeless pro-EU Tory voters from shifting their way. With the election likely to boil down to a shootout between pro-Brexit and pro-EU sides, what the Tory and Brexit parties will be fearing most are voting pacts between Labour, Liberal Democrats, Greens, Plaid Cymru (of Wales) and the SNP, whereby they would tactically withdraw candidates from contesting seats on a seat-by-seat basis in a way that would prevent splitting the anti-Tory Party/anti-Brexit Party vote. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HotForex Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.