Summary:
- Abe election victory lifts stocks around the globe
- JPY moves lower on expectations of further Abenomics
- USD gains with T-note and Gold under pressure
- Cryptocurrencies in the red with Bitcoin falling back below $6000
- GBP dips in the afternoon as May gives Brexit update
In line with expectations, incumbent PM Abe has maintained his super majority in Japanese parliament after a successful snap election victory over the weekend. The news was warmly welcomed by the market with the Japan225 rallying by more than 1% whilst the JPY slid on expectations of further stimulus.
There has been some small gains seen in most European indices at the start of the week, with Madrid a notable laggard with the SPA35 falling back near 10100 and below last week’s low. Across the Atlantic there have been more records, with all-time high opening levels seen in US indices. The US500 made a high above 2575 and has now made a peak that is within 1% of the big 2600 level.
One of the stars of the first part of the year in US stocks was Tesla, with the electric car maker seeing its stock surge to an all time high in the first half of 2017. Some comments from Saudi Prince Alwaleed bin Talal have failed to weigh on the stock today, with the billionaire investor describing Tesla as “too exuberant” for him to want to invest.
Mr Alwaleed has also weighed in with his opinion on cryptocurrencies with some disparaging remarks. The Royal likened the rise in Bitcoin to that seen in Enron and predicted that it will eventually implode. The crypto space was already lower on the day before the comments with Bitcoin falling below $5800 after peaking above $6100 over the weekend. Ripple is the worst hit with the market falling by just shy of 6% and in doing so falling below 0.19 to trade at its lowest level in almost a month.
The pound has begun the week with quiet trade with no real moves of note. Some early strength waned as PM May addressed parliament with a Brexit update, which was upbeat in nature but was still light in terms of details of concrete progress. BoE Deputy Governor John Cunliffe, speaking in South Wales, was fairly dovish with some comments which also punctured the early optimism in sterling.