Key Takeaways
Euro fell sharply after far right gains in European Parliament elections
U.S. inflation data and Federal Reserve meeting expected to impact markets
Markets now pricing in 36 basis points of Fed rate cuts this year
Dollar supported by paring back expectations for rate cuts
Bank of Japan expected to maintain short-term interest rates
Speculation of BOJ tweaking bond buying arrangements could impact yen
Macron dissolved the Assemblée Nationale after far-right gains in European vote
More conservative European Parliament will face pressure from the far right
Snap elections were a risky gamble for Macron
Despite poor results, the Greens aim to influence the EU agenda
Small group of confidants worked on the idea of dissolving the Assemblée- Poll projections showed far-right Rassemblement National (RN) gaining significant seats
Macron initially pretended disaster wouldn’t occur in European elections
Macron thought the European vote would be overshadowed by future events
Far-right journalist challenges Macron’s response to disastrous results- 69 € per month for complete digital access to quality FT journalism on any device
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Political and Economic Fallout from Recent Events
The recent far-right gains in the European Parliament elections have triggered significant movements in both the political and economic realms. Macron’s decision to dissolve the Assemblée Nationale following these results indicates a shift in the French political landscape. The rise of more conservative ideologies in the European Parliament will likely lead to increased pressure from the far right on policy decisions.
In the financial markets, the Euro experienced a sharp decline while the Dollar saw support due to reduced expectations for rate cuts. The upcoming U.S. inflation data and Federal Reserve meeting are expected to further impact market movements, with markets already pricing in Fed rate cuts for the year ahead.
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