CMC says trading volumes were "astronomical' overnight

Spreadbetting firms are expecting a tumultuous opening to financial markets, with activity expected to "ramp up" as trading desks digest overnight news of a hung parliament.

The uncertainty created by the failure of Theresa May's Conservatives to secure an overall majority in the General Election led to heightened volatility in foreign currency markets.

Sterling plunged from above $1.295 against the US dollar just before the exit poll was revealed at 10pm last night, while the euro the fell from above €1.155 to €1.138 at 6am this morning.

Read more: CMC boss says a Jeremy Corbyn win would plunge markets into turmoil

CMC Markets chief analyst Michael Hewson said trading volumes were "astronomical" overnight, some 10 times higher than usual levels.

And this is just the start according to Chris Beauchamp, chief market analyst at IG. He said:

There was definitely a ‘calm before the storm’, although it was still fairly mild compared to what we will see once London trading really ramps up.

There was split opinion from Britain's largest two spreadbetting firms on how overnight trading compared with that experienced in the hours that followed the Brexit vote.

Read more: Sterling stabilises after big drop with Tories set to rely on DUP for power

CMC said activity was much higher than in June 2016. But this was influenced by its decision to not widen margins, a move taken after immediate aftermath of the EU referendum result to protect investors.

Meanwhile, Beauchamp said: "Compared to Brexit it [trading] was still quite muted – both in volumes and price reaction.

"Had the Conservatives lost more then I suspect we would have had a bigger reaction, but they can get across the line (it seems) with the DUP, so compared to Brexit night the overall volumes were more sedate."

Full story: CMC says trading volumes were "astronomical' overnight: City A.M.

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