French Elections Result in Hung Parliament: Market Reactions and Future Projections
The worst-case scenario has unfolded in France, as the recent election results point towards a hung parliament. The leftist New Popular Front (NFP) has secured the most seats, leading to a significant drop in the euro. The political instability that accompanies a hung parliament poses considerable risks to the French economy.
Across the Channel, the UK’s new government is gearing up for their first budget announcement. With Labour at the helm for the first time in 14 years, markets are bracing for potential volatility in the lead-up to this crucial event.
Today sees a lull in major economic data releases, shifting the focus to Thursday when the UK will publish its GDP figures. Markets are anticipating a modest growth of 0.2% month-on-month, up from 0%.
Thursday will also be pivotal for the US, with the release of the Consumer Price Index (CPI). The CPI is expected to come in at 3.1%, a 0.2% year-on-year decrease, providing key insights into the inflation trajectory.
On the currency front, the pound is showing strong performance with notable gains against both the euro and the dollar. The pound-to-euro exchange rate is hovering just below the recent highs observed last month.
For additional insights on how these developments could affect your business or to capitalize on market volatility, please reach out to speak with one of our experts.