UPDATE 1-London banks, brokers up staffing as polls tighten before UK vote

By Kitco News / June 07, 2017 / www.kitco.com / Article Link

* Tightening polls add urgency to staffing plans

* Dealers keep Brexit, Trump surprises in mind

* Traders, analysts to stay late, start early, use Asia

* Pizzas ordered to fuel all-nighter


(Adds extended Tradeweb operating hours)

By Helen Reid

LONDON, June 7 (Reuters) - Bankers, brokers and money managers are pulling in extra staff to handle any big market moves on Thursday night as tightening polls make the outcome of the British election more unpredictable.

Currency, bond and equity trading desks in London will be staffed as results trickle in late on Thursday and in the early hours of Friday.

With opinion polls showing Prime Minister Theresa May's lead over the Labour opposition narrowing in the last three weeks and some suggesting her Conservatives could even lose their majority in parliament, the outcome looks much more uncertain than the landslide predicted when May called the election in April.

And after Britain's vote last June to leave the European Union and Donald Trump's election as U.S. President in November caught markets off-guard, traders are taking no chances.

"We'll have increased staffing overnight to cope with potential volatility, looking particularly at the exit poll at 10 p.m. and what it could do to markets if its suggests a hung parliament," said Neil Wilson, senior market analyst at spread betting firm ETX Capital.

"Then very much all hands on deck for the market open on Friday."

Fixed income trading platform Tradeweb said it would open early on Friday due to the election, extending its operating hours across all European asset classes from 0200 London time (0100 GMT). The big global banks in London have operations in Asia that would normally handle trading throughout the European night. But on Thursday night, they will be drawing on resources across the world.

"With high profile, market-moving events, we will have more staff working extended hours in one or more centres to make sure we can help our clients and manage our risk," HSBC said.

Barclays said foreign exchange sales and trading teams in London, New York and Singapore would stay late on Thursday and be at their desks early on Friday as results come through.

Thursday's vote will define Britain's approach to its divorce talks and future relationship with the European Union, which analysts say will be a major driver of UK assets. EXPECTING THE UNEXPECTED

One broker said that if results indicated an outright Conservative win, as suggested by a poll taken after Saturday's deadly attack in London, it would leave trading to colleagues in Asia. More volatile scenarios would keep London staff at their desks overnight.

Louis Gargour, chief investment officer of hedge fund LNG Capital, said his traders would work though the night with counterparties in Asia "if the unexpected happens".

"Investors with exposure to UK securities need to think ahead, we can't not hedge prior to the election and assume that we can liquidate positions or sell to hedge ourselves on Friday after the outcome," he said.

While UK stocks will begin trading at 8:00 a.m. (0700 GMT) on Friday and British government bonds only really trade when the futures market opens, also at 8:00 a.m., sterling is a global currency traded at all hours.

After the Brexit vote, the pound initially soared 1 percent to above $1.50 on polls showing the "remain" camp ahead. But as it became clear Britain had voted "leave", sterling fell, hitting 31-year lows around $1.32.

Trump's surprise election on Nov. 9 triggered a volatile day for the pound and a kneejerk fall in equities before they reversed course to rise on expectations his policies would fuel growth and reflation.

This time, the pound is down 2.8 percent in trade-weighted terms since May 10, giving back all the gains made since the election was called on April 18.

"In practice, only the currency markets are liquid enough to trade through the night," said Colin McLean, managing director of the UK equity growth fund at SVM Asset Management.

"We won't be in all night, but will likely make an early start," he added.

Currency analysts at ING said they would be in all night to watch the results and support clients.

Others, though, have no plans to increase staffing.

"Business as usual," said Northern Trust head of global equities Gary Paulin. "(There's been) no real change as the poll lead has narrowed, since it's still an expected Conservative victory, just a bit smaller," said Chris Beauchamp, analyst at brokerage IG.

For many, however, the risk of missing a big move was the over-riding concern.

"Brexit was the real eye opener - we stayed late but not that late, and the market traded very sharply on that outcome," said LNG's Gargour.

Those traders pulling an all-night shift will not be fuelled by adrenaline alone.

"Pizzas have been ordered," said ETX Capital's Wilson.


(Reporting by Helen Reid, Additional Reporting by Tricia Wright and Abhinav Ramnarayan, Editing by Angus MacSwan and Mark Potter)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities,securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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