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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.
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Editors’ Picks

EUR/USD trades around 1.1700 after rebounding from 50-day EMA

EUR/USD trades around 1.1700 after rebounding from 50-day EMA

EUR/USD gains ground after three days of losses, trading around 1.1700 during the Asian hours on Wednesday. On the daily chart, technical analysis indicates a potential for a bearish bias; the 14-day Relative Strength Index at 47 confirms waning momentum.

GBP/USD climbs above 1.3500 as US Dollar weakens ahead of ISM Services PMI

GBP/USD climbs above 1.3500 as US Dollar weakens ahead of ISM Services PMI

GBP/USD gains some ground after registering modest gains in the previous session, trading around 1.3510 during the Asian hours on Wednesday. The pair edges higher as the US Dollar struggles ahead of the US ISM Services Purchasing Managers’ Index and JOLTs job openings due later in the day.

Gold pulls back from $4,500 amid profit-taking ahead of key US macro data

Gold pulls back from $4,500 amid profit-taking ahead of key US macro data

Gold struggles to capitalize on its strong weekly gains registered over the past two days and faces rejection near the $4,500 psychological mark, or over a one-week high touched during the Asian session on Wednesday. As investors digest the recent US attack on Venezuela, the prevalent risk-on environment prompts some profit-taking around the commodity. 

Bitcoin, Ethereum and Ripple cool off as rally stalls near key resistance zones

Bitcoin, Ethereum and Ripple cool off as rally stalls near key resistance zones

Bitcoin, Ethereum, and Ripple prices are taking a breather on Wednesday near their key resistance levels following the recent surge. BTC faces rejection at the $94,253 level, while ETH and XRP follow BTC’s footsteps, struggling near $3,308 and $2.35, respectively.

Implications of US intervention in Venezuela

Implications of US intervention in Venezuela

Events in Venezuela are top of mind for market participants, and while developments are associated with an elevated degree of uncertainty, we are not making any changes to our markets or economic forecasts as a result of the deposition of Nicolás Maduro. 

What you need to know on Wednesday, January 7:

What you need to know on Wednesday, January 7:

What you need to know on Wednesday, January 7:

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