UK, markets welcome Starmer

UK Elections Without Shocks. French Markets in Fibrillation Over Alliances

In the UK, The elections did not shake local markets, with a predicted victory for Keir Starmer’s Labour Party. The Labour Party is on track for a parliamentary majority. Based on exit polls, the party is expected to win 410 of the 650 seats, its best result since Tony Blair’s victory in 1997. futures UK stock indices rose, with sterling holding onto recent gains to become the only currency to gain against the US dollar since the start of the year.

In contrast to British certainty, France faces uncertainty, with the second round of parliamentary elections due this weekend.Investors are worried about potential alliances, between a right-wing government, a coalition with the far left (rejected by Macron) or a possible stalemate. From 10

June, election day, the French index lost about 3.4%, with sharper drops at times. However, the market seems to want to return to normality, underlining how politics generates volatility but does not alter the underlying direction.

Banking sector recovers after ECB meeting

Minutes from the latest ECB meeting revealed that policymakers are concerned about the risks of low growth and persistent inflation in the coming quarters, adding to uncertainty about the central bank’s future moves. Meanwhile, new data from Germany points to continued economic weakness, with factory orders falling and the construction sector contracting. The ECB needs further confirmation that inflation is returning to 2% before considering further interest rate cuts, President Christine Lagarde said.

This uncertainty about the expectations of cuts by the ECB continues to support the banking sector, which has recorded record quarters, solid levels of capitalization, still convenient valuations, banking risk, high dividends and buyback policies. It is no coincidence that since the beginning of the year, the European banking sector has been at the top of the increases in the Stoxx 600, with an increase of about 25%, beating technology (+18.53%) and tripling the performance of the general Stoxx 600 index (+8.04%).

What’s Happening to Bitcoin? The Cryptocurrency Is Going Against the Global Markets and Losing $183 Billion

Yesterday, Bitcoin was the big star, but certainly not for good reasons. The king of cryptocurrencies is going through a dramatic phase, with a loss of billions of dollars in capitalization that has not been seen since 2022. In just four sessions, starting last Tuesday, Bitcoin has seen a whopping 183 billion dollars in value evaporate. The last time such a drastic change had occurred in such a short period dates back to over a year ago. Today, with the fourth day of decline underway, the total value of the cryptocurrency market has fallen below the threshold of 2,000 billion dollars, a level that has not been seen since February 2023.

In a context characterized by recent all-time highs in global stocks, a significant divergence emerges: while American and global stock markets have continued to rise since last June, Bitcoin has followed an opposite trajectory. The question that arises is whether this risk aversion in cryptocurrencies is an isolated phenomenon or whether it heralds a cautious quarter for traditional investments as well, after a strong first half for stocks.

With the euphoria of ETFs and the halving over, Bitcoin investors are now facing several challenges. These include a decline in demand for Bitcoin exchange-traded funds in the United States, seized token sales in Germany and the United States, and Mt. Gox redemptions.

These combined sell-offs, along with other moves, have led to the liquidation of approximately $935 million in long positions since last Tuesday, putting further pressure on the price of Bitcoin.

*eToro Market Analyst