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 consolidates around 0.7100 as geopolitical risks counter hawkish RBA
AUD/USD remains confined within a multi-week-old range, oscillating around 0.7100 in the Asian session on Tuesday. Bets for another interest rate hike by the RBA in May continue to act as a tailwind for the Aussie. However, a hit to sentiment from US-Israeli air strikes against Iran helps the safe-haven US Dollar preserve its overnight strong gains, capping the upside in the risk-sensitive Australian Dollar.
USD/JPY bulls seem hesitant amid intervention fears
USD/JPY is seen consolidating below the mid-157.00s and over a five-week high set on Monday as a dramatic escalation of geopolitical tensions in the Middle East continues to benefit the US Dollar's status as the global reserve currency. Moreover, reduced bets for an immediate rate hike by the BoJ seem to weigh on the Japanese Yen and act as a tailwind for spot prices. That said, intervention fears hold back the JPY bears from placing fresh bets and capping gains for the currency pair.
Gold clings to gains as US-Iran conflict continues to underpin safe-haven assets
Gold retains positive bias for the fifth consecutive day on Tuesday as rising geopolitical tensions in the Middle East continue to underpin safe-haven assets. However, a bullish US Dollar could keep the bullion below its highest level since late January, set on Monday, warranting caution before positioning for any further appreciation.
Strategy lifts holdings to 3.4% of Bitcoin's total supply amid inflows into crypto products
Strategy continued its accumulation of the top crypto last week, acquiring 3,015 BTC for $204 million amid renewed interest in crypto products after four weeks of outflows.
The Fed is finally talking about AI – Here's why it matters for the US Dollar Premium
AI is moving from earnings calls into the heart of monetary policy discussions, forcing Federal Reserve officials to confront a new question: How to act if AI reshapes inflation, employment and interest rates at the same time?
Here is what you need to know on Tuesday, March 3:
The United States, allied with Israel, struck Iran over the weekend, killing Iran’s Supreme Leader, Ayatollah Ali Khamenei. In retaliation, Iran launched missile and drone attacks targeting US military bases across several nations, with attacks from both parties still ongoing, fueling a geopolitical crisis.