Daily summary: Euro and European indices fall after EU elections
- Wall Street indexes started today’s trading slightly lower but have since recovered from their declines. The S&P 500 is trading 0.2% higher, the Nasdaq is up 0.4%, the Dow Jones is flat and the small-cap Russell 2000 is up 0.1%.
- The results of the European Parliament elections, especially strong showings by far-right parties in France and Germany, sent shockwaves through European financial markets on Monday morning.
- France’s CAC40 entered today’s trading session down more than 2% after French President Macron called snap elections for late June or early July in response to the EU election results.
- The euro also suffered and was the worst-performing G10 currency in the first half of trading on Monday. The eurodollar fell from 1.0800 at Friday’s close to 1.0730 shortly after midday today.
- Some of the initial fall was erased during the session, but European indices ended the day lower, with France’s CAC40 closing down 1.35% and Germany’s DAX falling 0.37%.
- The eurodollar partially recovered its fall after ECB President Lagarde’s comments and is now trading around 1.0760. Lagarde said rates do not necessarily follow a linear downward path and the ECB could hold rates steady for more than one meeting.
- Trading in major cryptocurrencies is mixed today, with Bitcoin up 0.4% and Ethereum down 0.6%.
- Energy commodities were also mixed, with oil up about 3% and U.S. natural gas prices down 2%.
- The New York Fed’s annual inflation expectations fell from 3.3% in April to 3.2% in May. Three-year inflation expectations remained unchanged at 2.8%. Five-year inflation expectations jumped from 2.8% in April to 3.0% in May
- Japan’s annual GDP growth for the first quarter of 2024 was revised from -2% in the first release to -1.8% in the second release. On a quarterly basis, GDP growth was -0.5% quarterly, the same as the pre-release.
- The Eurozone Sentix Index improved from -3.6 in May to 0.3 in June (exp -1.7).
- Norwegian consumer price inflation slowed from 3.6% yoy in April to 3.0% yoy in May (expected 3.3% yoy). Core CPI slowed from 4.4% to 4.1% YoY (previously 4.0% YoY).
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