The global markets are currently on edge as Asian markets cautiously assess the impact of the recent success of right-wing parties in the European Union on the cohesion of the bloc. While EUROSTOXX 50 futures have shown a slight uptick of 0.2%, FTSE futures remain stagnant. The euro is holding steady at $1.0766, slightly above its one-month low of $1.0733. French President Emmanuel Macron’s attempts to unite left-wing and centrist parties against the right have been met with resistance, with initial polls suggesting that the far-right National Rally party could emerge victorious in the snap election without an absolute majority.
In Asia, markets are showing mixed reactions with Japan, South Korea, and Taiwan trending upwards, while China experienced a slight dip as it responded to post-payrolls pressure after a holiday on Monday. Beijing’s decision to set the yuan at a seven-month low reflects the strengthening of the U.S. dollar as investors reassess the likelihood of Federal Reserve rate cuts. Speculations around the Fed’s upcoming meeting on Wednesday indicate a shift in projections towards fewer rate cuts this year, potentially pushing the easing measures into 2025.
Investors are closely monitoring the Bank of Japan’s meeting scheduled for Friday amidst speculations that monthly bond buying could be tapered by a trillion yen to 5 trillion as a precursor to a potential rate hike of 10 basis points in July. Meanwhile, Apple’s unveiling of its long-awaited AI strategy received a muted response from the market, with the company’s shares dipping by 0.3% in after-hours trading. The requirement of at least an iPhone 15 Pro or Pro Max to utilize the new technology could potentially incentivize customers to upgrade their hardware, driving future sales for the tech giant.
On Tuesday, market trends will be influenced by key developments such as UK May Claimant count, April wages, and unemployment data. Additionally, various ECB officials, including chief economist Philip Lane and French central bank chief Francois Villeroy de Galhau, are scheduled to speak. The Bank of Finland will also hold a press conference to discuss the outlook for the Finnish economy. Overall, global markets are bracing for potential shifts in economic policies and political landscapes that could impact investment decisions in the near future.