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“Politics does not move the tail – it trembles the whole dog.”
These strong words of a heritage manager in CNBC last week capture a first hectic half of trading. They also prepared the field for a second uncertain half, where the “geoeconomics” seems to remain a dominant market force.
This week, are waiting for attention to monetary policy, as central bankers around the world – who have kept their heads down in the middle of political tensions – are preparing to speak to the ECB forum in Sintra, in Portugal.
COMPOTION TO HOME
Many things have happened in the past six months, with trade tensions and trues that send stock markets around the world.
The VIX volatility index – also known as Wall Street Fear Gauge – increased in April in the form of pricing threats, followed by pricing breaks, caused huge intraday oscillations on the main clues. Meanwhile, the moments of “Black Swan” in the Middle East also kept investors on board.
Dax vs s & p 500
In the midst of all the uncertainty, some stock markets have shown remarkable resilience: the Dax of Germany remains outperforming in Europe, up more than 18% so far this year, followed by FTSE 100 of London up approximately 9%, while the French CAC 40 is offset with approximately 5% of earnings.
But what does all this mean to exchange in the second half? Goldman Sachs warns that “a high uncertainty of politics associated with an aggravation of the Macro backdrop is likely to support a greater volatility of actions in the coming months”.
Do not miss the best of the live programming of CNBC and events of all Europe, Asia and the Middle East On Youtube.
Central banks occupy the front of the stage in Sirtra
While Goldman’s warning promises to be noisily to the ears of investors, the scene is ready for central banks to return to the spotlight.
This week, the city of Sintra in Portugal welcomes the BCE annual forum, where European central bankers are joined by their international counterparts to discuss opinions on current policy issues.
The sun could shine in Portugal – but President Donald Trump recent comments I will undoubtedly launch a shadow on the meeting, when he continues to do unprecedented pressure on the president of the Federal Reserve Jerome Powell.
Last week, Trump’s name has extended, causing discussions on a so-called “Fed Shadow chair“Who could keep an eye on things to take over next year.
Powell has also exerted pressure on its monetary policy peers, calling on central bankers to stabilize until they see the impact of commercial prices: “We are well placed to wait and learn more about the probable course of the economy before considering any adjustment to our political position.”
Europe will have to decide to what extent it allows the American approach to dictate its policy, the president of the ECB, Christine Lagarde, opened the procedures in Sintra with a speech on Monday evening.
Expect in a hard-hitting tone; Recent Son OP-ED in financial time The viewed to the euro to take advantage of the current environment and “gain world importance”.
The first year of labor power
Next Friday marks the first anniversary of the Labor Party which took power in the United Kingdom, after 14 years of conservative regime. A landslide victory I saw a jubilant work return to Downing Street with the promise of change and growth. But the honeymoon was short -lived.
Quick advance of 12 months and Prime Minister Keir Starmer seems ready to reach his first year in power with Evacuation of approval of the fall Who put him below his rival leaders of the party, in particular Nigel Farage of the Reformation, the liberal-democrat Sir Ed Davey and the conservative chief Kemi Badenoch.
Starmer faced a lot of external pressure, ranging from a Public spat with Elon Musk to a multitude of challenges of foreign policy in Ukraine and the Middle East. Even three trade agreements – with Europe, India and the very first American agreement – did not do much to improve its popularity. But the economic challenges at home cause the most dissatisfaction, with pressure even inside his own party To review certain reforms.
