The Big Four:
Riots across Paris this weekend by protect group gilets jaunes have wrought havoc across the city, seeing an emergency meeting called by the French President Emanuel Macron upon his return from the G20 Summit in Argentina. Despite not being significant enough in order to move the currency adopted by some 340m+ people across 19 countries, this dissatisfaction that has effervesced to the political surface of the French Republic embodied within these riots does increase the level of political risk within the European single currency. Increasingly, European politics in Germany, Italy, Spain, and now France poses a risk to the stability of the Euro. Respectively, the rising far-right, a weak coalition government endorsing fiscal profligacy, secessionist politics, and chronic dissatisfaction are plaguing these populations. Together, these four countries comprise of over 252 million people; nearly three quarters of the total Eurozone population without even mentioning their GDP contributions! Safety in numbers? It depends which ones you look at 4/19 or 75/100. Should investors lose confidence in an increasingly ailing Euro, contagion could set in. Of particular note this weekend was the progress on trade talks made between the United States and China. The frosty trading relationship between the two leviathans of international commerce has thawed with both leaders having claimed progress and an intention to reduce inhibitions to trade. Accordingly, defensive Dollar demands has weakened, leaving the US currency vulnerable today. Across the Pacific, the Chinese Yuan has enjoyed its biggest intraday jump in two years, making ground away from the important 7 figure within USDCNY.
Today’s Global Market:
Discussion and Analysis by Charles Porter
Weren’t Tariffs USD Negative? The Dollar proved sensitive to headlines regarding trade during the US overnight session. However, contrary to what many commentaries would have you believe, as the risk of tariffs escalated the Dollar rose. The 90-day pause following Trump’s April ‘liberation day’ tariffs had been set to expire this coming Wednesday. To the […]
Dollar Reserves With the passing of Trump’s original deadline for the reimposition of liberation day tariffs yesterday, markets have breathed a sigh of relief. July VIX futures continued to slide lower. Moreover, what may surprise anyone who had been expecting the issue of tariffs to resurface following the passing of Trump’s new deadline, so too […]
Big Girls Don’t Cry A bond market tantrum and one of the sharpest one day sell offs in Sterling for several years appear to have been catalysed by the Chancellor’s appearance in PMQs yesterday. First: the back story. This Labour government has faced some embarrassment in recent weeks trying to get its welfare bill through […]