“Macron the New French President….”

Macron the new French President

Emmanuel Macron an independent centrist at 39 years old is to become the youngest ever elected French head of state winning with 66 percent of votes to defeat far right Marine Le Pen.   The focus is now on who Macron will name as prime minister after he is sworn as president on Sunday. The French will go back to the polls on 11 and 18 June to elect 577 members of parliament.  So far every French presidential election was followed with the winning party taking over control of parliament which is necessary to name the cabinet and passing laws.  However, a clear majority this time round looks unclear.

Growth in the Euro Area

According to the European Commission growth in the euro area shall be slightly stronger this year than previously forecasted.  The commission sees the economy of the 19 nations expanding 1.7 percent this year, while growing 1.8 percent in 2018.  Political uncertainty has declined since the Dutch and French elections according to the European Commissioner for Economic Affairs. The EU, however has to deal with two years of negotiations with Britain and its withdrawal from the EU and the more protectionist trade stance in the US by Donald Trump.  Unemployment is at 9.4 percent this year according to the commission, while inflation is projected at 1.6 percent.

Bank of England (BOE)

The BOE Monetary Policy Committee voted 7-1 in favour of holding rates at their record low of 0.25 percent, while voted 8-0 to keep Gilt purchases at 435 billion pounds.  Growth forecast has been trimmed this year from 2 percent to 1.9 percent while the forecasts for 2018 and 2019 are at 1.7 percent and 1.8 percent respectively. 

Oil

Oil has declined to $45 a barrel which was driven by expanding US output, Although OPEC’s curbs increased the prices to their highest since 2015, oil prices are still more than 50 percent lower than those in 2014.  The increase in prices has led to the US pumping more oil and crude production according to the Energy Information Administration rose to 9.29 million barrels last week, which is the highest level since August 2015.  Demand is not expanding as expected.   Any recovery in crude will depend on usage by countries such as China, India and the US.  The International Energy Agency has trimmed the forecast for global oil demand by about 100,000 barrels a day less to 1.3 million a day as a result of the weaker consumption in the Organisation for Economic Co-operation and Development member countries.  According to a report last month there was an abrupt slowdown in economic activity in India and Russia. With regards to China which is the world’s second-biggest oil user consumption seems to slow down.

Trump fires the FBI Director

Donald Trump fired the FBI Director James Comey who is in charge of investigating Trump’s campaign’s possible ties to Russia.  He is now facing intense scrutiny from Democrats and some Republicans as to why he was dismissed.  Comey’s firing fueled calls for a special prosecutor.

South Korea

South Korea held an election on Tuesday for a new president following the corruption scandal of Park Geun-hye.  South Korea new leader Moon Jae-in started his single five-year term. His landslide win looks more due to the collapse of his opponents than an endorsement of his vision for South Korea.  Moon’s proportion of the votes was near the lowest of any leader since 1987 when the nation’s first democratic election took place.  The Kospi index hit a record high on Monday following brighter prospects for the global economy and was 0.2 higher on Wednesday, with technology stocks rising on hopes that the new president will boost the sector.

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