What a week! There’s so much going on these days that it seems like every time you blink, you miss about five thousand things. So, to put it lightly, blinking is blinking annoying.
If you’ve been blinking this week, don’t worry — let’s fill you in with at least a few of the thousands of things you may have missed.
Theresa’s Had Enough
Even the most avid blinkers would have struggled to miss this one. UK Prime Minister Theresa May announced that she would step down from her position, following three embattled years that have been completely and totally overshadowed by Brexit.
The outgoing PM will officially hop off the №10 bus on 7th June. A new Conservative Party leader (and thus PM) is now being sought. It’s expected that, by the end of July, the UK should have a new Premier and, potentially, yet another new direction for Brexit.
How Did the Markets Take it?
May had been pushing for a “soft brexit”, which seemed to shape GBP traders’ thoughts as the pound has struggled slightly over the last two weeks. This has now (temporarily?) been taken off the table and traders will likely hover in ‘wait-and-see’ mode to see who wins the leadership contest.
We’ll probably see GBP consolidate at this level until that question is answered. Should favourite, Boris Johnson, win the election and push for a ‘no-deal Brexit’, expect the pound to drop.
The FTSE wasn’t that bothered, to be honest (sorry Theresa!). Around 70% of the FTSE is made up of international firms, so the US-China trade issues are having more of an impact. Traders would be wise to keep a close eye on any noteworthy developments there.
The Disunited States?
No amount of blinking would have stopped you from knowing that the EU parliamentary elections were upon us. Here are some key points, in case you missed them:
- The overall turnout this time was just over 50%. That’s the highest since 1994. NICE!
- Eurosceptic parties have taken less than 30% of the seats. Which is good, considering it’s an election for the EU!
- Pressure is building on French President Macron following BIG gains by far-right party, En Marche; while snap elections in Greece could be bigger news with Italy and Germany holding the status quo.
- The European Parliament is sticking to the recent trend of a number of national parliaments — the end of a two-party majority. Not so good for those who like quick decision making.
- Results haven’t really flipped the coin in any particular direction. The mammoth game of international musical chairs that we call the European Union, continues to go on…
Global Markets Take a Tiny Wobble
US and UK markets were shut on Monday, so they were pretty quiet! The eurolost some ground against the dollar on Monday afternoon, trading just below $1.12, carving up its earlier gains.
By Tuesday, EUR had a little wobble, dipping by 0.1%, primarily due to the fact that political risks in Europe remain high. USD rose 0.2% and currently sits just below a two-year high — Lovely! GBP slumped by 0.1% due to yet more uncertainty and Brexit comments from PM-hopefuls.
The yen currently seems to be in a holding pattern, rising 0.2%. Mr. Trump, who is currently visiting Japan, is expected to put pressure on Tokyo to reduce the nation’s large trade surplus with the US, so keep your eyes peeled!
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