Market Snapshot – Theresa May Calls Snap Election in UK

British PM Theresa May Calls for General Election on June 8

UK Prime Minister has called for a general election on June 8, obviously looking for a strong mandate from the public as she heads into negotiations with the EU. May, believes she has a strong advantage, and will easily win given her place in the polls. The main opposition party, Labour, have formally supported Brexit in the wake of the referendum, while the much small Liberal Party, is against. The election doesn’t therefore seem likely to derail Brexit. The pound whipsawed on the news first declining and then soaring higher.

Pound Jumps after May’s Announcement

The British pound jumps versus all currencies on Tuesday after PM Theresa May announced a snap general election on June 8.

The pound bounced back to trade at 1.2671 from intraday low of 1.2516 to hit ten-weeks high. Investors believe that May will make a softer stance on the Brexit negotiations.

FTSE 100 is trading lower on Tuesday, performing its worst day since Brexit vote day, down 1.84%.

Markets Focus Has Shifted to French Elections

The latest round of French opinion polls shows Macron and Melenchon still gaining support, with the daily OpinionWay poll showing backing for Macron rising to 23% from 22% and Melenchon to 19% from 18% in the previous poll.

Support for Le Pen remained unchanged at 22%, according to OpinionWay. The least Ifop poll and Elable polls also show Macron ahead of Le Pen with Melenchon a close third. With Macron set to beat Le Pen by a wide margin in the second round on May 7.

Crude Oil Prices Slide on Surge in US Shale Production

Crude oil futures are trading lower shortly before the regular session opening as investors react to a bearish government report.

According to the U.S. Energy Information Administration’s drilling productivity report, U.S. shale production in May is likely to post the biggest monthly gain in more than two years as producers step up the pace of drilling with oil prices holding above $50 a barrel.

Government data released on Monday showed that May output is expected to rise by 123,000 barrels per day to 5.19 million bpd.

If this information is right, May production will post its biggest monthly increase since February 2015 and the highest monthly production level since November 2015.