Far-right shock in European stock markets

European stock markets started the week with a decline.

Following the opening, the Stoxx Europe 600 benchmark index is trading at 520 points with a 0.69 percent decrease, and the DAX 40 index in Germany is trading at 18,424 points with a 0.71 percent drop.

In the UK, the FTSE 100 index fell 0.61 percent to 8,195 points, the MIB 30 index in Italy lost 0.94 percent to 34,335 points, the IBEX 35 index in Spain fell 0.80 percent to 11,314 points, and the CAC 40 index in France is at 7,848 points with a 1.93 percent decrease.

The euro/dollar parity is currently hovering at 1.0760 levels, 0.4 percent below the previous close.

Global markets started the week with a negative trend following the results of the European Parliament (EP) elections held over the weekend, coming after the non-farm payroll data in the US that exceeded expectations on Friday, while the interest rate decisions of the US Federal Reserve (Fed) and the Bank of Japan (BoJ) have become the focus of investors this week.

In France, the far-right National Rally (RN) party took first place in the EP elections with a 31.50 percent share by a wide margin, while President Emmanuel Macron's Renaissance party came in second with 15.2 percent.

MACRON ANNOUNCES SNAP ELECTIONS

Making statements after his party suffered a clear defeat, Macron acknowledged that the results were "not good for parties that defend Europe" and announced that snap elections would be held between June 30 and July 7.

European Commission President Ursula von der Leyen said that according to the results of the EP elections, greater responsibility falls on the groups in the center.

Emphasizing that the election results sent a message that those who want a strong Europe are in the majority, as the group she belongs to came in first, von der Leyen said, "So the center is holding, but it is also true that the extremes on the right and left have gained support. Therefore, the result places great responsibility on the parties in the center."

On the other hand, despite the European Central Bank (ECB) cutting its 3 main policy rates by 25 basis points each, concerns that the Fed will cut interest rates later than expected increased after the non-farm payroll data announced in the US on Friday exceeded estimates, causing the Euro to lose value against the dollar.

Furthermore, while estimates that the Fed will cut interest rates only once this year have strengthened as the non-farm payroll data exceeded expectations despite the rise in the unemployment rate in the US, the bank is expected to keep its policy rate unchanged on Wednesday.

Stating that the signals to be received from the policy text and the forward guidance to be provided by Fed Chair Jerome Powell are expected to be effective on the direction of the markets, analysts noted that following these developments, the pricing in money markets showed that the probability of the Fed making its first interest rate cut in September fell from 83 percent on Friday to 51 percent, and for November, it dropped from 81 percent to 77 percent.

Analysts noted that the Sentix investor confidence index data in the Eurozone will be monitored today.

News Source: AA