Market Snapshot – Focus Shifts to Dutch Elections

All Eyes on Dutch Elections and the Tension with Turkey

Things have certainly heated up in Holland ahead of the Wednesday’s election, with the Dutch barring Turkish ministers from being permitted to address Turkish expats in the Netherlands, the Dutch government banning a planned rally, while also refusing the landing of a plane carrying the Turkish foreign minister.

The Turkish prime minister, Erdogan saying that the Netherlands is acting like a ‘banana republic,’ while Dutch Prime Minister Rutte calls for the Turkish prime minister to apologise for Nazi remarks also made, though not just to the Dutch, but also the Germans, as governments across Europe raise concerns over Turkey’s government and democratic principles.

The markets will be watching the outcome closely, a surprise victory by Wilders expected to raise the stakes going into the French and German elections, a populist victory across the three member states an unthinkable for the establishment, the ECB and the markets.

UK Government is Expected to Trigger Article 50

The UK government is widely expected to trigger Article 50 of the Lisbon Treaty as soon as tomorrow, which begin negotiations with the EU on divorcing terms.

The government should have sufficient votes for the Brexit bill be passed by MPs today, and a follow-up vote in the House of Lords tomorrow would also likely be approved. This won’t be a surprise for markets, but the focus will quickly turn to the response of EU negotiators.

The pound is trading higher versus US dollar at 1.2224, +0.45%.

Global Stocks are Mixed on Dutch Elections and Central Banks Decisions

European stock markets are moving sideways, DAX and FTSE 100 manage marginal gains, but the DAX is still struggling to clear the 12000 mark and the Euro Stoxx 50 is down -0.15%.

This follows a largely positive session in Asia, where the Hang Seng outperformed with a more than 1% gain, but the ASX closed slightly in the red.

Investors are cautious ahead of this week’s round of central bank decisions in the U.S., Japan, U.K. and Switzerland. Markets also follow the increasing tension between the Netherlands and Turkey and the Dutch elections on Wednesday.