Daily Market Report 20.05.2019

  UK Prime Minister Theresa May is set to quit the job within weeks after her new Withdrawal offer has been submitted to the parliament. Members of the party are meanwhile staking out their positions ahead of the race. Boris Johnson is still leading the polls, but Works and Pension and Former Home Secretary Amber Rudd is also in contention. On the other side, the Labour party is moving closer to backing a second referendum following news that polls now put the Liberal Democrats and their Remain stance 2nd in the upcoming European elections. Labour leader Jeremy Corbyn is getting closer to the view that the public should get to vote on any deal that is eventually reached, an opinion already voiced by a number of senior members of his party. Meanwhile, real-estate figures show residential property prices are falling in almost all London boroughs. 

Australia Prime Minister Scott Morrison claimed a surprise win following this past weekend’s elections, clinging to power without any need for support by the independents. The country’s centre-right government is getting straight back to business, pledging to pass signature tax cuts to shore up a slowing economy, with pledged rebates seen crucial in boosting consumer spending and buoying an economy that has been growing uninterruptedly for almost three decades. Australian stocks rallied and the Aussie dollar jumped at the market open. The news is a disappointment to environmentalists who were hoping to increase the use of renewables to generate electricity and reduce coal-fired power and mining exports.

A scandal over state contracts prompted The Social Democratic governor of Austria’s Burgenland province to end cooperation with the Freedom Party on Sunday calling early elections. Heinz-Christian Strache resigned as Freedom Party leader and Deputy Chancellor on Saturday after he was caught on video offering to fix government contracts. Conservative Chancellor 32-year old Sebastian Kurz responded by calling snap parliamentary elections, which are expected to be held in September and political parties have lost no time in moving to an election footing. The Freedom Party is part of the European far-right alliance with Italian vice-premier’s Salvini and France’s Marine Le Pen. 

Asian shares were mixed and U.S. equity futures rose as investors awaited the next chapter in the Sino-American trade dispute. Indian stocks rallied after election polls showed Prime Minister Narendra Modi’s ruling coalition is poised for victory in general elections. Japan’s yen slipped as unexpected economic growth in Japan came with reasons for caution. The dollar index edged higher to build on last week’s gains. Shares in South Korea and Taiwan also rose. The Taiwan SE Weighted Index added 0.3% and Seoul’s KOSPI rose 0.6%.