Theresa May Calls Snap Election In UK After Getting Sick Of “Game-Playing

Well, you knew this was going to be something dramatic right from the start. Just check out the buildup:

U.K. PM Theresa May Making Statement at 11:15am Local Time: BBC
GBP/USD REVERSES GAIN, DROPS BELOW $1.2550 BEFORE MAY STATEMENT
U.K. 10-YR GILT YIELDS EXTEND DROP TO 3BPS BEFORE MAY STATEMENT
U.K. 10-YEAR YIELD DROPS BELOW 1%; FIRST TIME SINCE OCTOBER

So that was at roughly 5:00 a.m. EST. And then, an hour later:

MAY COULD ANNOUNCE GENERAL ELECTION FOR JUNE 8TH: BBC
MAY SAYS SHE PLANS TO SEEK EARLY U.K. ELECTION ON JUNE 8

As you can see, cable and gilts were whipsawed:

GBP

“Our opponents believe that because the government’s majority is so small, our resolve will weaken,” May said in Downing Street in London on Tuesday after holding cabinet meeting. “They are wrong [but] if we do not hold a general election now, their political game-playing will continue.”

And in case there was any confusion: “We need a general election and we need one now.”

Well, ok then. The FTSE promptly dropped to its lowest since February 24.

FTSe

Here’s Bloomberg with some useful color:

Theresa May should be having a miserable weekend after a catalog of blunders and political ambushes gave her the worst week she’s had since replacing David Cameron as U.K. prime minister eight months ago.

In the space of five days, May faced a new demand for Scotland to hold a referendum on quitting the U.K.; a record fine on her Conservative Party from the election regulator; a key tax policy falling apart; and claims from the White House that Britain helped spy on President Donald Trump before his election.

To cap the week, former Chancellor of the Exchequer George Osborne — who May fired when she took over — announced on Friday he was becoming a newspaper editor and would be fearless in holding power to account. Osborne is seen as a critic of May’s approach to Brexit, and his appointment to lead London’s Evening Standard stunned May’s aides and angered her allies.

In normal times, such a cocktail of political pain would constitute a crisis. Yet May’s Conservative team are privately relaxed because there is no prospect of a threat to her rule from the main opposition Labour Party. This means May’s drive towards a hard, clean Brexit remains largely unchallenged.

“This should be her week from hell,” said Philip Cowley, professor of politics at Queen Mary University of London. “It should be really bad but the most striking thing is, it isn’t really bad. She will have a glass of wine on a Friday night and go to bed perfectly relaxed because there is simply no effective opposition.’’