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The end of May... (in both senses)

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As anticipated, Brexit taking over the headlines and the whistle for PM May's premiership is finally going to blow in extra-time. A bad result today in European elections will act as a catalyst for Conservatives to pull the trigger. After Tories lost over 1,300 seats in local elections, it is likely the Conservatives will finish in 5th today with around 7% of votes ... a shambles. In the very very immediate term, she is likely to stay as the caretaker until the party finds a new leader (Johnson already decided).

A Johnson premiership will increase the odds of a no-deal scenario and this is very much what are witnessing in the early stages of pricing in Sterling crosses. Uncertainty remains high and "real money" tracking for an orderly exit remains sidelined as odds of a no deal continue to increase. The next chart uploaded here will be updating the game tree for remaining Brexit scenarios with odds (%).

For the technicals, those in EW will know it is clear we are inside the 3rd wave of a 5 wave sequence to the downside. Wave 1 was impulsive in nature and suggests the underlying tone remains to the downside. Whilst wave 2 was a textbook zig-zag retrace wave as you would expect and since then the beginning stages of wave 3 also looks impulsive.

Best of luck all those already positioned for Sterling weakness.

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We are cracking through support