UNITED STATES (VOP TODAY NEWS) — Introducing the top 5 financial market news on Monday, May 27, 2019. The New York and London stock exchanges are closed today due to the weekend.
1. European populists could not come forward
Mainstream political parties held their positions during the elections to the European Parliament. As a result, the right-wing populists failed to significantly improve the results of five years ago, although the traditional center-left and center-right parties lost part of the electorate in favor of the “green” and other centrist blocs.
The UK election results showed that the votes that the Conservatives and Labor Party had lost were mostly for the benefit of parties favoring EU membership, and not for the favor of quitting. The United Kingdom Independence Party, led by Nigel Farage, won the most seats.
In Italy, the right-wing populist party “League of the North” came forward, and this was due to the votes lost by the Five Star Movement, the government of the League of the North.
The spread between the yield of Italian and German ten-year government bonds, which indicates the level of concern about political risks in Italy, rose by a modest 2 basis points to 269 basis points. The euro is holding no significant changes at $ 1,1197.
2. Trump says he doesn’t want a regime change in Iran
Oil prices fell to their lowest level in two months, after US President Donald Trump said he did not want a regime change in Iran. Trump’s words have somewhat eased concerns about geopolitical risks, which was one of the factors supporting oil prices. One of the key geopolitical risks is the growing trade war between the United States and China, which is beginning to influence the growth rate of the global economy.
Futures for Brent crude at 11:45 MSK was worth $ 67.48, falling in price compared with yesterday’s $ 69.20. American oil, meanwhile, fell 0.4% to $ 58.41.
The data released on Friday showed that investors reduced the volume of oil rates for the fourth week in a row.
In addition, the fall in oil prices has led to the fact that American oil companies have reduced the number of existing drilling rigs to the lowest level since March of the previous year.
3.Fiat Chrysler proposed merger with Renault (PA: RENA )
Fiat Chrysler Automobiles offered Renault, a French car company, to merge, after which the combined company will become the third largest car manufacturer in the world after Toyota (T: 7203 ) and Volkswagen (DE: VOWG_p ).
The offer of the American-Italian company involves special dividends of 2.5 billion euros ($ 2.8 billion), which will “equalize” the value of companies.
A few weeks earlier, Nissan, a longtime strategic partner of Renault, refused another offer to further integrate the companies. The relationship between Renault and Nissan deteriorated due to the fact that the former CEO of Renault Carlos Gon in Japan was accused of fraud.
4. China beats the yuan
Guo Shuqing, who heads the China Banking Regulatory Commission, warned speculators on Saturday not to play lower prices for the yuan, saying that “this will inevitably lead to losses.”
On Monday, Yuan opened with a strengthening against the US dollar after a statement by an official, but lost most of its achievements after data showed that in April there was the largest drop in profits of Chinese industrial companies in three and a half years. On an annualized basis, profits fell by 3.7%. The dollar ended the Asian trading session at 6.8911 yuan.
The decline in the profitability of Chinese companies is one of the main reasons why analysts fear that Beijing may be forced to let the yuan fall in price, compensating for the damage caused by the increase in import tariffs in the United States. Guo’s words indicate that Beijing is no less concerned about the rest of this scenario.
5. Bitcoin grows in price
Bitcoin jumped in price by almost 10% to the highest level in more than a year, although it is difficult to establish the reasons for this, as usual.
The cryptocurrency reached an intraday peak of $ 8953.80 before rolling back a bit.
Bitcoin jump occurred in the Asian trading session, with most of the fluctuations occurred within half an hour.
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