European equity markets are in positive territory this morning as the political success of Emmanuel Macron in France has boosted investor confidence. Mr Macron was tipped to gain a majority and that he did, and traders welcomed the news as political stability in Europe is a welcome change.
Homebuilders like Bellway (LON:BWY), Persimmon (LON:PSN), Barratt Developments (LON:BDEV) and Taylor Wimpey (LON:TW) are all higher on the day even though the latest house price survey from Rightmove showed that asking prices fell in June. The decline of 0.4% was blamed on lower wage growth and the political uncertainty due to the Conservatives losing their majority.
The pound is higher against the US dollar and the euro as Brexit talks begin in Brussels today. Brexit Secretary, David Davis, is aiming for a ‘deal like no other in history’, and he is confident it can be achieved. Traders are mindful it is going to be a long and drawn out process, and that striking the right balance between diplomacy and financial sensibility must be struck.
The EUR/USD rallied in the early part of the morning but since then has reversed its gains. The news that Emmanuel Macron’s party, La Republique en Marche!, secured a majority in the national assembly bodes well for the single currency.
We are expecting the Dow Jones to open 68 points higher at 21,452, and we are anticipating the S&P 500 to open at 2440, up 7 points. Federal Reserve Bank of New York President William Dudley is due to speak in Plattsburgh at 1pm.
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