UK Election, James Comey testimony the only focus for markets
A massive night for markets, with plenty of events having the potential to cause market volatility.
Later tonight, the polls will open for the much anticipated UK election. Theresa May called the election earlier this year in order to strengthen her strong majority in the parliament. This was to help ensure her Brexit negotiations ran smoother as she would be able to pass policies through the UK parliament easier. However, the opposition leader, Jeremy Corbyn, has had a strong campaign. As such, the polls have gone form an overwhelming majority in favour of Theresa May, to a huge tightening that looks like eroding her majority and possibly pushing her into a minority government. There are also some sections saying that there is an outside chance of Jeremy Corbyn winning.
The other major event is the testimony of former FBI chief, James Comey. Comey is due to testify in front of a committee investigating whether President Donald Trump interfered with an investigation linking one of Trump’s former advisors, Michael Flynn, to Russia. The investigation is also looking into Russian “hacking” of the US election. A lot of media coverage has been given to this investigation with plenty of allegations being levelled at the President, including possible impeachment. No doubt, whatever testimony Comey gives, it will be interpreted entirely differently depending on which side of the political spectrum you look at.
The ECB is also meeting to discuss and set interest rates later tonight. This would normally be one of the headline events for markets, but it seems somewhat ‘drowned out’, considering what else is going on in the world. With talk that the ECB is looking at cutting its inflation forecast, it would be hard for the ECB to justify a tightening of monetary policy. The most important thing to come out of this meeting will be the economic outlook for Europe and the future of monetary policy.
Elsewhere around the world, China is releasing Trade Balance data, Europe is set to publish Swiss Unemployment Rate & CPI, German Industrial Production, French Trade Balance and Revised GDP. The US will be reporting Unemployment Claims & Natural Gas Storage figures, and finally, Canada is releasing Housing Starts, HNPI and BoC Financial System Review data.