Election results in India and Australia may see markets shrug off a muted and negative close of the trading week on Friday night. Both results are seen as market friendly, and the Australian dollar jumped at this morning’s opening. A data packed week and ongoing trade concerns could limit any initial enthusiasm.
Oil markets are firm this morning but the ongoing dispute between the US and China is weighing on industrial metals. Presidents Xi and Trump are both expected to weigh in this week, a potential sign of escalation. A stronger US dollar is also taking a toll on trading. US durable goods and manufacturing PMIs due this week could shed light on the economic impact of the ongoing negotiations.
European PMIs and UK inflation reads are also possible drivers of currency and stock market performance this week.
As counting continues it appears Australia’s conservative coalition will command an outright majority in the lower house of Parliament. The electoral result contradicts months of opinion polls. In the weeks leading up to Saturday’s vote local investors braced for a series of policies that increased the tax burden on investors. The surprise result, and defeat of these market damaging policies, could push the Australia 200 index to an eleven year high today.
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