Market Roundup – June 2017
UK politics threaten to dominate the financial markets through May and into spring.
Teresa May or may not win in June, despite calling an election with an opinion poll lead that suggested it was hers to lose, the labour revival continues through policy of telling people what they want to hear and the Lib Dems targeting the 48% that voted remain by promising a second referendum.
Macron’s win in France gave a renewed confidence to those at the centre of project Europe –on the continent attention now turns to the German election and whether Merkel will remain as Chancellor meanwhile over the pond Trump’s project to clean up Washington seems to have stalled through a series of problems of his own making.
Despite an ever-changing political landscape in the UK, the rest of Europe and the US, the UK market has seen highs in the FTSE 100 and S&P 500 with European equities hitting their highest close in two years. The Bank of England repeated its positive outlook for the UK economy alongside positive growth figures coming out of Germany the US and Japan.
Predicting America seems to be dependent on Donald’s ability to get his views across in 140 characters on Twitter at any moment – all of the pro-growth and pro-business policy making that has seen the S&P surge since the start of the year risks being unwound as investors take profits fearing political turmoil. The UK election will have its inevitable will they /won’t they moments over the coming weeks which is sure to inject a healthy dose of volatility into the mix.
From an investor’s perspective, currency movements remain a significant concern; analysts at Barclays believe that sterling could rebound to €1.30 against the euro by early next year and $1.38 against the dollar within 12 months. This could see the post-Brexit gains in equities unwind relatively quickly despite some fundamentally strong numbers coming out of UK companies.