Election Outcomes to Spur Market Confidence

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Throughout 2017, some of the world’s leading economic superpowers will be holding elections. The recent presidential contest in France is soon to be followed by a snap poll in the UK on Thursday 8th June, with further polls scheduled to take place in Germany and Argentina. 


Polls have already been held in South Korea, Iran and the Netherlands, with the results delivering convincing wins for moderate, pro-business candidates. For the new South Korean president, Moon Jae-in, the markets’ reactions have been positive.

Since President Moon was sworn into office earlier this month, the Seoul KOSPI index has risen by just over 20 points. His pledges to engage more with North Korea and reform the Chaebols may have spurred investor confidence.

May Into June

One election that will have a wider impact than any other this year is the General Election in the UK. As it stands, Theresa May’s Conservatives are on course for an increased majority, but a Tory win is likely to result in a hard Brexit. Mrs May’s campaign is focused on getting the UK out of the EU by taking a tough stance in negotiations.

Should the Tories retain power, there will be a great deal of uncertainty in the European markets about how relations will be between the UK and EU. A Labour win, however, may have a serious impact on confidence of big businesses. They are proposing a big rise in Corporation Tax to fund extra spending on the NHS, education and social care.

Live indices trading data from Oanda reveals that the FTSE 100 is just over the historic 7,500 mark, having reached that milestone earlier this month. It has been fairly steady compared to other major stock markets.

Germany Votes

The third major European nation to go to the polls, Germany, is in rude economic health. The DAX has risen by over 5% in the last three months, whilst compared to many of its neighbours, there are few concerns over the horizon. Another victory for Angela Merkel’s CDU is likely, with recent opinion polls suggesting that her party has an 11% lead over the opposition SPD.

Although the Federal Election is not until September, outcomes in the UK and France could shape how well Mrs Merkel does. The relative stability of the German economy could be at stake if the process of the UK leaving the EU becomes messier than expected. German trade with the UK, historically strong, may suffer.

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