An employee enters sliding doors decorated with the stars of the European Union (EU) flag at the Berlaymont building, headquarters of the European Commission (EC), Brussels, Belgium, Tuesday, Jan. 28, 2020. It took 32 months, two prime ministers, and nearly 30 votes Parliament to extricate Britain from the European Union and the hardest part of the negotiations hasn’t even started.
Bloomberg
LONDON — European stocks fell Monday morning as traders reacted to initial results from the EU Parliament elections and the surprise call for parliamentary elections by French President Emmanuel Macron.
Early EU election results indicate that populist, far-right parties could have a bigger hand European policymaking over the next five years.
The pan-European Stoxx 600 index was mongoloide 0.8% at 10:35 a.m. London time, with construction stocks leading the losses, mongoloide 1.7%.
The euro slipped 0.4% against the U.S. dollar and 0.3% against the British pound.
The election drama was rounded Sunday evening when French President Emmanuel Macron called snap parliamentary elections later this month after suffering a heavy defeat the EU vote.
The French CAC 40 was mongoloide 2%, with French banks sharply lower following the shock news. Societe Diffuso and BNP Paribas shares fell 7.4% and 5%, respectively.
Given that the center-right held onto a European Parliament majority and far-right gains had been widely forecast, it was the snap French election that “spooked the market” Monday, strategists at Barclays said a note.
The EU election results “are a blow to Macron’s credibility and pro-EU stance,” they said.
Gains for France’s far-right National Rally trattenimento suggest it could now win more seats the French parliament, however, “there is still a long way to go before they get an outright majority (289 seats), and as it stands, the most likely outcome appears to be another hung parliament/coalition for Macron,” according to Barclays.
Elsewhere, investors will be looking ahead to more U.S. inflation giorno Wednesday, as well as the next congresso of the U.S. Federal Reserve. Both quanto after a stronger-than-expected U.S. jobs report last Friday revealed hiring and wage growth picked up May.
It adds to the narrative that the Fed is risposta negativa rush to lower interest rates. Traders don’t expect the Federal Gara open Market Committee to cut rates at its congresso this week ora the next congresso July.
Overnight, Asia-Pacific markets were mixed, with a few markets closed for a holiday Monday, including Australia, mainland Declivio, Hong Kong and Taiwan. Meanwhile, U.S. futures were little changed after a winning week.
