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Market View

Market Recap – EU Elections

Monday, May 27, 2019 10:56 AM GMT

The results of the EU Elections are clarifying the political landscape.

In Germany, it was the first drive-test of the Christian Democrats without the leadership of Chancellor Merkel. CDU gathered 28.7% of the votes from 35.3% in 2014 and continues enjoying the fist place.

In France, Macron’s agenda was being tested, following his responses to the “Yellow Vests” movement that absorbed his attention over the last 6 months. His party gathered 22.4% of the votes and has dropped to the second place. Marine Le Pen’s far-right National Rally party was first with 23.5%.

In the UK, the political landscape is changed. The majority of the votes have been gathered by the Brexit party of Nigel Farage (31.7%) while the second place is now enjoyed by the Liberals (18.6%) a party that presents itself as the “true remain party”. The Labor party stands third (14.1%), while the Tories have dropped to the 5th place (8.7%).

In Italy the momentum of the far-right League has been confirmed, as they have gathered 33.6% of the votes. Their coalition partner, 5Stars Movement, has lost half of its 2018 size, gathering 16.7% of the votes and has dropped to the 3rd place.

In Greece the pro-growth party of Kyriakos Mitsotakis recorded a convincing victory, forcing Alexis Tsipras to call snap elections in June, 4 months before the ending of his term.

The big picture is that the EPP (European Peoples Party, center right) and S&D (Social Democrats, center left) that used to hold the majority of the seats in the former EU parliament, would now need the seats of the ALDE party (Liberals, third biggest block) to keep the majority.

Market’s reaction to the results seems positive with UK’s, German, French, Japanese, Australian, Chinese and US equities strengthening.

 

Macro releases: No market moving releases are scheduled for today. Low volumes are expected due to the bank holidays in the UK and the USA.

 Disclaimer

The views expressed do not constitute investment or any other advice /recommendation /suggestion and are subject to change. Reliance upon information in this material is at the sole discretion of the reader. Opinions expressed in the report do not represent the opinion of Zulutrade and do not constitute an offer or invitation to anyone to invest or trade.

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