Summary
The British electorate on Thursday faces the likely and unusual result of a hung Parliament, that is, without a clear majority for either main party, Conservatives or Labor. Coalition governments are common on the continent but rare in England. Except for the current arrangement between the Conservatives and the Liberal Democrats, the only two prior coalition governments in the last 150 years were during the two world wars of the 20th century. Coalitions, at least in formation, tend to give fringe political views greater weight in government. In Britain the likely coalition parties are the Scottish Nationalists, the anti-European UK Independence Party, UKIP, and the current government partner the Liberal Democrats. The Scottish Nationalists are mainstream social democrats and aside from their focus on Scottish nationalism are unlikely to challenge the governing consensus on British membership in the European Union or to advocate joining the euro. The UKIP is a different story. They garnered the fourth most votes in the 2010 elections and won the highest share of any party in the 2014 European Parliament elections. They advocate leaving the European Union and much greater independence from continental concerns. A strong showing, let alone consideration or inclusion in government would send shockwaves throughout the European political and financial establishments. Economic crisis have a way of dispensing with old political arrangement and fomenting new. We may be at the beginning of Europe’s emergence from the sureties of the post war world. Join us on Thursday for a sense of history as it happens. Read here our special interview with Joseph Trevisani about UK Elections.Latest Live Videos
Editors’ Picks
AUD/USD looks weak, breaches below 0.7000
AUD/USD quickly forgets about Wednesday’s advance and resumes the weekly correction, breaching below the 0.7000 mark to hit fresh two-day troughs and opening the door to a potential challenge of monthly lows in the 0.6950-0.6940 band. In the meantime, the increasing flight-to-safety environment is expected to keep the Aussie and its risk-linked peers under intense pressure for now.
EUR/USD flirts with three-day lows near 1.1570
EUR/USD resumes its march south on Thursday, revisting the 1.1570 region, or three-day lows, ahead of the opening bell in Asia. The intense sell-off in the pair comes in response to the solid performance of the US Dollar amid the still unresolved crisis in the Middle East. Moving forward, investors are expected to shift their focus to the release of the US NFP on Friday.
Gold: further weakness could challenge $5,000
Gold comes under fresh selling pressure on Thursday, slipping back below the $5,100 mark per troy ounce. Persistent strength in the US Dollar (USD) is preventing the yellow metal from building a meaningful recovery, even as markets remain risk-averse amid the deepening conflict in the Middle East.
XRP rises as crypto market steadies despite Middle East war
Ripple (XRP) continues to demonstrate notable resilience as the cryptocurrency market navigates the persistent war in the Middle East after the United States (US) and Israel attacked Iran on Saturday.
Two PMIs, two Chinas Premium
China’s economic data are often treated with a degree of caution by global investors. The challenge is not necessarily that the numbers are incorrect, but that they can describe very different parts of a vast and complex economy. Nowhere is that more evident than in China’s PMIs.
Here is what you need to know for Friday, March 6:
The US Dollar (USD) is being supported by crude oil prices, which rose to its highest level since July 2024, amid headlines of potential interruptions to the Strait of Hormuz and attacks on vessels in the region.