Wayne Cole gives his outlook for European and global markets.
Asian markets are closely watching the impact of the success of right-wing parties in the European Union and what it means for EU cohesion.
EUROSTOXX 50 futures rose 0.2%, stabilizing after Monday’s decline, while FTSE futures were little changed. The euro also traded at $1.0766, above a one-month low of $1.0733.
French President Emmanuel Macron is reportedly trying to bring together left-wing and center parties to counter the right, but has so far had little success.
Initial opinion polls suggest that the far-right National Rally party could win the general election, but not with an absolute majority.
Asian markets were mixed, with Japan, South Korea and Taiwan all rising but China falling under pressure after the release of its post-holiday jobs data on Monday.
China also held the yuan to a seven-month low, reflecting a rise in the U.S. dollar as investors scaled back expectations for a Federal Reserve interest rate cut. The Fed meets on Wednesday, with many analysts predicting it will cut interest rates two or even once this year, rather than three.
Meanwhile, fewer cuts this year could mean easing stretches back to 2025, shifting the number of rate cuts from three to four.
The Bank of Japan meets on Friday amid talk of cutting its monthly bond purchases by 1 trillion yen to 5 trillion yen as a step towards a 10 basis point increase in July.
Meanwhile, the market had a muted reaction to Apple’s long-awaited AI move to integrate its “Apple Intelligence” technology into its suite of apps, with the iPhone maker’s shares down 0.3% in after-hours trading.
Optimists noted that the software requires at least an iPhone 15 Pro or Pro Max, which could result in customers upgrading their hardware.
Key trends that could impact markets on Tuesday:
– UK unemployment claims in May, wages and unemployment data for April
– Several ECB officials made statements, including from Chief Economist Philip Lane and François Villeroy de Galhau, Governor of the Bank of France.
– Bank of Finland press conference on the outlook for the Finnish economy
– U.S. NFIB Small Business Optimism Survey
(Writing by Wayne Cole; Editing by Sam Holmes)
