Market sentiment analysis:
- The European Parliament elections have done nothing to restore trader confidence.
- Money continues to flow into haven assets such as the Japanese Yen and German Bunds, while stock markets remain off their recent highs.
Trader confidence ebbs
The results of the European Parliament elections have failed to restore confidence in the financial markets despite a poorer showing for the far right than some traders had expected. The overall picture remains one of waning support for mainstream parties, with a possible confrontation between the EU and Italy a particular concern for Euro bulls.
EURUSD Price Chart, One-Hour Timeframe (May 13 – May 28, 2019)
Chart by IG (You can click on it for a larger image)
That has damaged risk sentiment, increasing the demand for havens such as German Bunds and resulting in Bund yields hitting their lowest levels since September 2016. Concerns about who might become the next President of the European Central Bank are also a background worry, outweighing talk of more monetary stimulus from China.
In this webinar, I looked at the charts of all the major assets, at the forthcoming confidence figures that might move the markets and at the latest IG Client Sentiment data.
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— Written by Martin Essex, Analyst and Editor