Currency markets are holding steady and stocks on the rise so far today. US index futures are up 0.3%, while the FTSE, DAX and Nikkei are all up 0.50% to 0.75%.
Over the weekend, French president Emmanuel Macron's EN Marche party won a big majority, followed by the centre-right Republicans, while the Socialists were left far behind. Easing political risk concerns have gold slipping slightly.
Brexit talks are set to get underway today. For the last year, both sides have been staking out hard line positions, but with talks starting the street may look for areas of compromise. Apparently the UK has agreed to discuss exit terms before a new trade deal, having previously promoted pursuing both tracks at once. UK prime minister Theresa May is looking for a two-year session of parliament to deal with Brexit-related legislation. There continue to be rumblings of potential challenges to her leadership, particularly if she goes soft on Brexit.
The Paris Air Show is underway. It’s not expected to be a blockbuster for aircraft orders but they have been steadily rolling in all morning, mainly from leasing companies. Orders have mainly been for Boeing 737 and 787 plus Airbus A320 models, but nothing yet for the Airbus A380 or Bombardier CSeries. The show could keep aerospace companies in focus through this week. We also could see the grocery sector in the spotlight again as traders digest the fallout and implications of Amazon's deal to purchase Whole Foods.
Traders should be aware the President Trump is thinking about taking action to support and protect the US steel sector. The third downleg of the 2000-2002 big bear market started when the then-president, George Bust, slapped a steel tariff on China. Trade risks to the market could emerge this summer with NAFTA renegotiations set to start in August.
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