Markets had a relatively quiet day on Friday as various geo-political risk events loomed ahead over the weekend. European elections and UK PM Theresa May’s resignation fall out were the main concerns for investors and so far both have come through largely as expected with little volatility in the markets. Both the Euro and the pound have experienced relief rallies against the greenback over the last couple of sessions but may find their moves limited as trade issues come back sharply in focus as this week progresses. Equity markets experienced a better day on Friday although gains were limited, the US indices all closing less than 0.5% up and US treasury yields remain under pressure with the barometer 10 year now trading near 2.32%. The Oil market found some support after experiencing its hardest week this year, WTI trading around $58.80 and Brent just above $69 as we enter the new trading week.
Geo-politics are expected to continue to dominate markets this week with unsettled political situations in both the UK and Europe. The search is on for the UK’s next Prime Minister and further uncertainty will add volatility to the pound with Brexit clearly the main focus for politicians. The Euro could also see sharp trading conditions as the fallout from elections hits the EU, already Greece is set to go to the polls again after the ruling Syriza party lost heavily to the New Democracy party over the weekend. President Trump is in Japan at the moment and is set for talks with PM Shinzo Abe, he has advised that a trade deal can only come after elections in July but investors will monitor a scheduled press conference later today for any details on a currency clause and US tariffs with regard to a proposed trade deal.
Looking ahead to todays trading and the economic data calendar is very quiet with little on the cards in the Asian session and bank holidays in both the UK and the US. Investors are expected quiet trading conditions but will be monitoring news wires closely as geo-politics and trade concerns continue to remain relevant.