ShareLONDON: Global stock markets slipped while the euro retreated Tuesday on concerns about the potential economic fallout should the far-right win power in France in weekend elections.
London was also lower and the pound traded mixed heading into a UK general election Thursday which the opposition Labour Party is expected to win. The dollar firmed as investors weighed the possibility of another Donald Trump presidency after last week’s poor debate performance by incumbent Joe Biden.
Wall Street stocks struggled to find direction in early trading as markets await employment data, with analysts pointing to caution while Federal Reserve Chair Jerome Powell participates in a panel discussion with other central bankers. “Political concerns continue to weigh on European stocks,” noted Joshua Mahony, chief market analyst at Scope Markets.
“Overall, underlying (European) inflation remains on a downward path, not least because of weak growth, and June data support the expectation of more ECB rate cuts in 2024, perhaps starting next September,” said GianLuigi Mandruzzato, senior economist at EFG Asset Management.
Candidates in France on Tuesday faced a deadline to register for the run-off round of a high-stakes parliamentary election, as President Emmanuel Macron’s centrist camp and a left-wing alliance scrambled to prevent the far-right from taking power. On Sunday, French voters go to polls for the decisive final round of the snap election Macron called after his camp received a drubbing in European elections last month.
His gamble appears to have backfired, with the far-right National Rally (RN) of Marine Le Pen scoring a victory in the first round of voting last Sunday. Ahead of the vote, official data Tuesday showed eurozone inflation cooled in June—but experts said it would be insufficient to convince the European Central Bank, or ECB, to accelerate its rate-cutting cycle despite sluggish economic growth.
Elsewhere Tuesday, Asia’s main stock markets closed higher, with Hong Kong enjoying a rare surge after a recent run of losses. Tokyo piled on more than one percent to end above 40,000 points for the first time since April. — AFP
