•
Every poll was wrong: Conservatives win
UK election!!!
– They
increased their seats to 316, close to the 323 needed for a majority
– Could run a
minority government, since none of the other parties would want to re-run the
election again. (Assuming the exit polls are correct!)
– Removes the
major political risks : either a Labour government with SNP support, or
no government at all. BUT it means referendum on EU membership in 2017!
– Sterling up
sharply on the news; likely to trade on economic fundamentals again until the
risk of the referendum starts to be a major issue
•
RBA lowers forecasts in Statement on Monetary
Policy
– Says it is
prepared to “adjust policy if needed” = easing bias
– I expect
another rate cut as China slows further, AUD to weaken
•
Incredible volatility in Bunds
– Range
yesterday: 0.58% to 0.78%!; Market waiting to hear Constancio’s speech today
•
Today:
– Eurozone: German
industrial production, trade figures for March
– Canada:
Unemployment rate for April expected to rise = CAD-negative
– US: Nonfarm
payrolls for April expected @ 230k, up from 126k; unemployment to fall to 5.4%
from 5.5%. Anything over 200k would be USD-positive
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