The British pound was the stand-out amid muted moves in many markets, weakening on the prospect of a hung parliament in next week’s U.K. election and handing a boost to stocks. Crude fell a second day before the release of supply data.
Sterling dropped for the first time this week as a poll showed Theresa May’s Conservative Party may fall short of a majority. The currency’s weakness lent a hand to British equities, and the FTSE 100 Index rose as miners and energy companies weighed on the broader European gauge. Oil extended losses amid doubts prolonged cuts by OPEC and its allies will succeed in clearing a surplus as U.S. output remains resilient.
“The importance of politics as a market driver currently can’t be overstated,” Societe Generale SA strategist Kit Juckes wrote in a client note.
Uncertainty about the reliability of polling seems to have helped contain the pound’s retreat, but the moves are a reminder of the potential risks surrounding a series of national elections in Europe this year. Meanwhile, with key central bank meetings next month on both sides of the Atlantic, investors remain focused on this week’s slew of economic data to gauge both the strength of the global economy and the path for interest rates.
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Here are some of the key events coming up:
- The EIA is due to release its monthly supply reports.
- Federal Reserve official Robert Kaplan will be speaking in New York on Wednesday.
- The Fed’s Beige Book is out today. It may reflect healthy gains in hiring, but household spending probably rose only modestly, while retail sales were mixed and…