Live updates: Wall Street rises but ASX tilts to open lower
2 mins read

Live updates: Wall Street rises but ASX tilts to open lower

There’s a lot going on by the water.

Rabobank’s senior macroeconomic strategy specialist, Stefan Koopman, describes the European elections in a new note. Here’s some:

“The overall left-right ratio is consistent with predictions that showed a tilt but not a tilt to the right. In the coming weeks, national parties will formally elect their European groups, which could change the number of seats.

“The fight for the top jobs begins this week at the G7 summit. The most desired roles are the Presidency of the European Commission, the European Council, the European Parliament and the Head of Foreign Affairs of the EU. The first summit of EU government leaders will take place on June 27 and 28, where they will seek to nominate a new president of the European Commission.

“We still have a long way to go, but the consequences are clear. Even though the center maintains a majority, this is the most right-wing European Parliament ever elected. The results signal Europe’s shift towards conservative and radical right-wing policies and away from progressive and ecological policies. The center will have to adapt to this change in the coming years and will have to tilt to the right at times to maintain its majority. ANDt means that the internal politics of the EPP will be the main factor determining the direction of European politics, being both the median and the largest party in this parliament.

A big surprise also in Paris, where – after the scandal in the European elections – French President Macron called the elections.

Or as Koopman put it…

“…I decided it was time to play 3D chess and calling early parliamentary elections on June 30 and July 7, just two weeks before the start of the Olympic Games. With this bold move, she puts Le Pen’s Rassemblement National to the test, which dominated yesterday’s elections, winning 31.5% of the vote.

“The two-round system often creates difficulties for populist parties, leaving the far right unable to achieve a clear majority.”

The obvious economic consequences of these decisions, most immediately visible in the impact on the euro.

“The euro is the worst performing G10 currency this morning, trading at 1.075 at the time of writing. CAC 40 (French stock index) The CAC 40 fell by 1.5%, dragging the EuroStoxx 50 down towards a loss of -1.2%. EGB yields are rising and spreads are widening, including for France. The 10-year bond currently offers a yield of 3.17%, up 8 basis points from Friday’s close.