Investors lose while voters vote
- French President Hollande has decided not to seek re-election. This is not necessarily a huge surprise, as a man with a 4% approval rating is likely to consider very carefully whether he should submit himself to the judgement of the voters.
- The UK government has lost a seat in Parliament, which (given their small majority) may be viewed as a problem. The by-election was cast as a vote on the government's post referendum stance; there was no challenge to the referendum result, simply a challenge to the nature of the negotiations.
- The Italian referendum and the Austrian presidential election take place this weekend. The outcomes may not be that critical of themselves – Italian governments come and go, and the Austrian presidency is not the most powerful of EU positions. However investors may take these votes as signals of the extent of support for populism.
- A December US rate increase is seen as certain, reducing the focus on today's employment report. The tight labour market provides an inflation backdrop for Trump's mooted stimulus. The sell-off in global government bonds since the US elections is roughly three times the size of the rally in equities.