England Finally Win the World Cup – Pound To Rally? (1 min read)
Football in 1966, rugby in 2003, and now cricket in 2019: at last England can add another year to its rather barren hall of fame with Sunday’s thrilling victory in the World Cup finals. Surprisingly, it’s their first since the competition’s inception in 1975 – like Brazil in football, Australia have so far taken home the majority. But surprising though the win may be, what’s unsurprising is that, unfortunately, most of the world doesn’t care about cricket.
Being a market strategist, the first thing I thought to do after the England victory was to see if financial markets would move on the win. So, I dug out the history of cricket World Cup winners and looked at various market reactions to a country’s win. Looking at historical market performance on the week around World Cup finals, I found that a country’s bonds tended to rally after a win, and stock markets would lose momentum. But the data was patchy at best.
I had the most complete data for FX markets and there I was able to find a better relationship (see chart): the currency of the winning nation would tend to rally after a win!
Of course, this is all just a bit of fun – my stats are spurious at best – but if the pound does rally this week, you heard it here first!
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)
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