In the next 2 month there are now two major elections held in Europe setting the tone for stockmarkets.
Most traders might be focused next wednesday on the FOMC meeting. But same day is the Dutch election wich might trigger European Stockmarkets. Italy is a part of this and again large specs betting against Italy, obviously.
World News | Thu Mar 9, 2017 | 5:18pm EST
Macron consolidates lead over Le Pen in French election polls
Quote: The Coming Italian Bond Explosion
We think there are many reasons why Italian bond yields are likely to go higher, like eurozone tensions, a rising yield global environment, ECB tapering, political uncertainty, etc.
The Summary above is from February 27, 2017. At least since this day the polls had changed dramatically, fast and ---> silent. Any "noise" until now is on the side of populism, even in UK, USA or Europe. Traders have build a"frame" in their minds if ever they hear "election/polls/populism". The final election data might change this only. Some smart investors trading this now and they force shortsellers to cover their shorts.
If ever Wilders in NL and LePen might not win, what is mispredicted in the summary above?
- political uncertainty
- eurozone tensions
Than go ahead and think twice: If ever there are no eurozone tensions and political uncertainty and same time ecconomic fundamentals improving than ECB tapering might be bullish even for stocks and bonds. Better economy means finally less debt so that all reasons mentioned here are obsolete. Maybe not in generall but a part or most. Finally this means that expectations on bets against Italy might be medium term overdone. To cover shortposition might be the answer wich is left for shortsellers.
Number of seats to win next wednesday:
PVV: 22 (Netherlands far right party, Geert Wilders, hould had won 38 in June 2016)
Quote: President Donald Trump's approval rating has fallen to 37% — a new low, according to a Quinnipiac University national poll released Wednesday. The poll found the president to be losing crucial support among Republicans, men, and white voters. The survey of 1,056 voters from across the US found that Trump's approval among Republican voters dropped to 81%, from 91% of those surveyed in a similar Quinnipiac poll two weeks ago. His disapproval rating among that group jumped to 14% from 5%.
The poll showed those in Trump's most supportive demographics — male and white voters — to be increasingly unhappy with his performance. Forty-three percent of men approved of Trump — down from 49% in the most recent poll, while 44% of white voters approved, also down from 49%. "Most alarming for President Donald Trump, the demographic underpinnings of his support, Republicans, white voters, especially men and those without a college degree, are starting to have doubts," the assistant director of the poll, Tim Malloy, said in a statement. Source: http://uk.businessinsider.com/trumps-app...
If far right French presidential candidate Marine Le Pen loses the election, it will spur a "significant" surge of inflows into European stocks, JPMorgan said in a note Monday.
JPMorgan estimated that a Le Pen loss will see at least 10 percent of assets under management flow back into the region's stock markets. It noted that since the beginning of 2016, around $100 billion has flowed out of the segment, according to EPFR data, marking up a loss of nearly 10 percent of assets under management. "We believe that these flows at least could come back into the region, should political uncertainty fade, in addition to any potential new net inflows," JPMorgan said. Some opinion polls have shown that Le Pen, leader of the far right, anti-European Union, anti-immigrant National Front party, could be a top pick in the first round of voting in France's presidential election on April 23.
A healthy majority of analysts and experts believe Le Pen, who wants to pull France out of the euro zone, won't win the second round of voting on May 7 if she makes it past the first. But fears abound over a potential dark horse Le Pen victory, in line with political surprises such as Brexit and Donald Trump's U.S. presidential win. That's spurred concerns of a potential French exit from the euro azone, dubbed Frexit, and even a possible breakup of the bloc. While JPMorgan noted that any "Le Pen loss" lap of inflows was likely to boost the euro, it didn't expect that would weigh on European stocks, which have benefited from a weaker currency. "We think a stronger euro would not be an impediment for regional equities and, in fact, believe the euro will turn positively correlated to euro zone equities, no matter the election outcome," it said. It noted that the euro is typically seen as a vote of confidence in the region. Source: http://www.cnbc.com/2017/03/28/jpmorgan-...
Two votes had been won by populists: The Brexit and the U.S. Election. Now lets have a look, how the latest approval rates are for Donald Trump:
MAR 30 2017: Majority of Americans think Trump's doing a poor job and the country is headed in the wrong direction: Poll
Trump's approval rating slips to another new low, much lower than resent presidents at this point in their terms
Quote: In recent polls, AfD (Germany´s far right party) has dropped dangerously close to the five percent threshold
Head of AfD, Frauke Petry (41), who has been under pressure within her Party, has now struck back – by indirectly threatening to step down
In recent polls, AfD has dropped dangerously close to the five percent threshold (currently seven percent, according to Allensbach). Without Petry, this might become even more of a tight squeeze. In the end, the party might fail to make it into parliament. Source: http://www.bild.de/politik/inland/frauke...
Quote: Michael Hasenstab is betting against the euro, a striking position for an investment manager celebrated in Europe for throwing the weight of Franklin Templeton’s flagship bond fund behind Ireland and Hungary as they emerged from the debt crisis. Speaking to the Financial Times, his comments highlight the concerns of many international investors, amplified following a campaign pledge from Marine Le Pen, presidential candidate of the far right in France’s upcoming presidential election, to withdraw the country from Europe’s single currency.
YouGov predicts the Conservatives may win just 310 seats – 16 shy of an absolute majority