Europe is electing its Parliament. Fundamental analysis for 19.05.2014
19.05.2014
The European Parliament elections are approaching, voting will begin on Thursday, but the official results will be announced only with the closing of the last polling station on Sunday evening. The reason that the elections will take place over a few days is the possibility of some countries to send the bulletins by mail without visiting the polling station. However, the first data on polls may appear much earlier.
The results of the elections of the European Parliament may show a record number of supporters of the right-wing parties, negatively viewing the EU and, in their majority, requiring the return of a significant number of powers to the national level. For example, in Britain the vote will be a real barometer of support for the idea of pulling out of the EU. Prime Minister David Cameron has aimed to hold such a referendum for some time.
The upcoming vote in Greece can turn into a new political crisis. The current parliamentary coalition has a very slight advantage, and if after the election the Populist Party "SYRIZA" will receive more support than the pro-government forces, the entire cabinet would suddenly become the "lame duck." It is possible that the authorities subsequently have to go to early elections.
Given that the economic situation in Greece had just started to stabilize, the growing popularity of populist- anti Europeans can simply close the window of opportunity to start the restoration process. Meanwhile, amid even the very small reduction in unemployment over the past six months, investors have begun to return to the country. From the start of the year, Athens managed to attract around € 15 billion to the bond market.
Meanwhile, the latest words of Mario Draghi and his colleagues about the future measures to combat inflation were taken very seriously. According to a recent survey by Bloomberg, 90% of economists expect easing of policies by the regulator at the June meeting. Earlier, a member of the Executive Board of the ECB Peter Praet did not rule out that the deposit rate may be reduced to a negative level.
No important macroeconomics events are scheduled for Monday, so the Eurodollar is likely to continue to be adjusted. In the future, amid expectations of action by the ECB, the market may start to decline again, drawing enthusiasm from the current statistics and the likely outcome of the high number of right-wing parties in the European Parliament elections. That is why I am keeping my short positions, and plan to continue to build them up.
RoboForex Analytical Department
The results of the elections of the European Parliament may show a record number of supporters of the right-wing parties, negatively viewing the EU and, in their majority, requiring the return of a significant number of powers to the national level. For example, in Britain the vote will be a real barometer of support for the idea of pulling out of the EU. Prime Minister David Cameron has aimed to hold such a referendum for some time.
The upcoming vote in Greece can turn into a new political crisis. The current parliamentary coalition has a very slight advantage, and if after the election the Populist Party "SYRIZA" will receive more support than the pro-government forces, the entire cabinet would suddenly become the "lame duck." It is possible that the authorities subsequently have to go to early elections.
Given that the economic situation in Greece had just started to stabilize, the growing popularity of populist- anti Europeans can simply close the window of opportunity to start the restoration process. Meanwhile, amid even the very small reduction in unemployment over the past six months, investors have begun to return to the country. From the start of the year, Athens managed to attract around € 15 billion to the bond market.
Meanwhile, the latest words of Mario Draghi and his colleagues about the future measures to combat inflation were taken very seriously. According to a recent survey by Bloomberg, 90% of economists expect easing of policies by the regulator at the June meeting. Earlier, a member of the Executive Board of the ECB Peter Praet did not rule out that the deposit rate may be reduced to a negative level.
No important macroeconomics events are scheduled for Monday, so the Eurodollar is likely to continue to be adjusted. In the future, amid expectations of action by the ECB, the market may start to decline again, drawing enthusiasm from the current statistics and the likely outcome of the high number of right-wing parties in the European Parliament elections. That is why I am keeping my short positions, and plan to continue to build them up.
RoboForex Analytical Department
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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.