Next week, we’ll know the outcome of the Dutch election and whether UK Prime Minister Theresa May will make the self-appointed deadline to trigger Article 50, so marking the beginning of the UK’s exit from the EU.
French election campaigns are also in full swing with plenty going on; the first round will be held on April 23rd, and while Independent candidate, Emmanuel Macron, and National Front leader, Marine Le Pen, remain the leading favourites, there’s plenty of time for polls to change. In Germany, opinion polls for the September election narrowed between Merkel’s CDU party and the SDP party led by Martin Schulz.
The markets responded by beginning to price in a substantial amount of risk, with the spread between French and German bond yields increasing to the widest in over four years.
Outside politics, rising inflation and GDP growth figures in Germany continue to highlight the divergence between core and peripheral Europe, which could become a major factor in 2017. In the UK, GDP numbers showed the largest growth of any of the G7 nations (although this was surpassed by German GDP growth later in the month). The Bank of England also raised their GDP growth forecasts for the UK.
In the US, markets witnessed a continuation of performance from January and late 2016. While the market still awaits further policy information from the Trump administration, Equity markets rallied as the reflationary policies of newly inaugurated President Trump sparked optimism about future growth.
To read more about the markets included in our Market Summary, please download the Full Market Review February 2017.
