Cable up more than 100 pips from the lows
Cable stumbled early but has been on fire in the past two hours. Part of that is broad US dollar weakness after the employment report but the pound is still far outperforming the field.
What's behind the gains?
I think yesterday's local elections are a big part of it. Labour and the Conservatives both had terrible nights with the Liberal Democrats surging. The takeaway is that neither party is winning as they remain bogged down on Brexit. Labour has tried to play both sides with hints at another referendum while blocking progress. Conservatives are an internally divided party and May's leadership is crippled.
The hope for pound bulls is that the castigation in the local vote inspires both parties to sit down and earnestly work to get a Brexit deal done. Both will be on the defensive for a time after it's done but neither party has found a way to capitalize with voters and they may want to move on.
May herself recognized this after the results and said voters had sent the "simple message" that her party and Labour had to "get on" with delivering Brexit.
