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FTSE/mib: Politics Driven Market

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Most traders might be focused on the Dow or the DAX. Sometimes it´s helpfully to watch if a move is broad-based and simultaneous in major stockmarkets globally.

In the next 2 month there are now two major elections held in Europe setting the tone for stockmarkets.

Most traders might be focused next wednesday on the FOMC meeting. But same day is the Dutch election wich might trigger European Stockmarkets. Italy is a part of this and again large specs betting against Italy, obviously.

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Dutch Election, March 15th 2017:
en.wikipedia.org/wiki/Opinion_polling_for_the_Dutch_general_election,_2017

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France Election:

First Round, April 23rd 2017 en.wikipedia.org/wiki/Opinion_polling_for_the_French_presidential_election,_2017

Second Round, May 7 2017 en.wikipedia.org/wiki/Opinion_polling_for_the_French_presidential_election,_20

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MAR 09 2017: This is the news and Markets going to trade it.

Quote:
World News | Thu Mar 9, 2017 | 5:18pm EST
Macron consolidates lead over Le Pen in French election polls
Source: reuters.com/article/us-france-election-idUSKBN16G095

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MAR 09 2017: The Dutch AEX follows the polls - exactely:

Pro´s Betting On Victories Of Far Right Wing Parties.

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MAR 09 2017: France CAC-40 follows the polls- ecactely:

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MAR 09 2017: EURO Stoxx 50 follows the polls- exactely:

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MAR 09 2017: Why Investors / Traders betting against Italy?

Quote: The Coming Italian Bond Explosion
Summary
We think there are many reasons why Italian bond yields are likely to go higher, like eurozone tensions, a rising yield global environment, ECB tapering, political uncertainty, etc.
Source: seekingalpha.com/article/4049965-coming-italian-bond-explosion

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MAR 09 2017: Why are getting those shortsellers now in trouble?

The Summary above is from February 27, 2017. At least since this day the polls had changed dramatically, fast and ---> silent. Any "noise" until now is on the side of populism, even in UK, USA or Europe. Traders have build a"frame" in their minds if ever they hear "election/polls/populism". The final election data might change this only. Some smart investors trading this now and they force shortsellers to cover their shorts.

If ever Wilders in NL and LePen might not win, what is mispredicted in the summary above?

- political uncertainty
- eurozone tensions

Than go ahead and think twice: If ever there are no eurozone tensions and political uncertainty and same time ecconomic fundamentals improving than ECB tapering might be bullish even for stocks and bonds. Better economy means finally less debt so that all reasons mentioned here are obsolete. Maybe not in generall but a part or most. Finally this means that expectations on bets against Italy might be medium term overdone. To cover shortposition might be the answer wich is left for shortsellers.

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MAR10 2017: 5 days before the Dutch Election Netherlands anti-Islam and anti EU Party PVV is falling behind.

Number of seats to win next wednesday:

VVD: 25
CDA: 22
PVV: 22 (Netherlands far right party, Geert Wilders, hould had won 38 in June 2016)
GL: 20
en.wikipedia.org/wiki/Opinion_polling_for_the_Dutch_general_election,_2017

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March 23 201, French Election: After first TV-Debate Macron is taking the lead for the first round of election

Macron: 26%
LePen: 25%
Source:en.m.wikipedia.org/wiki/French_presidential_election,_2017

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MAR 24 2017: Trump's approval rating craters in poll — and his base is the culprit

Quote: President Donald Trump's approval rating has fallen to 37% — a new low, according to a Quinnipiac University national poll released Wednesday. The poll found the president to be losing crucial support among Republicans, men, and white voters. The survey of 1,056 voters from across the US found that Trump's approval among Republican voters dropped to 81%, from 91% of those surveyed in a similar Quinnipiac poll two weeks ago. His disapproval rating among that group jumped to 14% from 5%.
The poll showed those in Trump's most supportive demographics — male and white voters — to be increasingly unhappy with his performance. Forty-three percent of men approved of Trump — down from 49% in the most recent poll, while 44% of white voters approved, also down from 49%. "Most alarming for President Donald Trump, the demographic underpinnings of his support, Republicans, white voters, especially men and those without a college degree, are starting to have doubts," the assistant director of the poll, Tim Malloy, said in a statement. Source: uk.businessinsider.com/trumps-approval-rating-craters-in-poll-and-his-base-is-the-culprit-2017-3?r=US&IR=T

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For Trump, it was the lost art of the deal

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MAR 28 2017: JPMorgan: A Le Pen loss will be a win for European equities

Quote:

If far right French presidential candidate Marine Le Pen loses the election, it will spur a "significant" surge of inflows into European stocks, JPMorgan said in a note Monday.

How significant?

JPMorgan estimated that a Le Pen loss will see at least 10 percent of assets under management flow back into the region's stock markets. It noted that since the beginning of 2016, around $100 billion has flowed out of the segment, according to EPFR data, marking up a loss of nearly 10 percent of assets under management. "We believe that these flows at least could come back into the region, should political uncertainty fade, in addition to any potential new net inflows," JPMorgan said. Some opinion polls have shown that Le Pen, leader of the far right, anti-European Union, anti-immigrant National Front party, could be a top pick in the first round of voting in France's presidential election on April 23.
A healthy majority of analysts and experts believe Le Pen, who wants to pull France out of the euro zone, won't win the second round of voting on May 7 if she makes it past the first. But fears abound over a potential dark horse Le Pen victory, in line with political surprises such as Brexit and Donald Trump's U.S. presidential win. That's spurred concerns of a potential French exit from the euro azone, dubbed Frexit, and even a possible breakup of the bloc. While JPMorgan noted that any "Le Pen loss" lap of inflows was likely to boost the euro, it didn't expect that would weigh on European stocks, which have benefited from a weaker currency. "We think a stronger euro would not be an impediment for regional equities and, in fact, believe the euro will turn positively correlated to euro zone equities, no matter the election outcome," it said. It noted that the euro is typically seen as a vote of confidence in the region. Source: cnbc.com/2017/03/28/jpmorgan-a-le-pen-loss-will-be-a-win-for-european-equities.html

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APR 01 2017: For Stockmarket Traders the Brexit is linked with "the rise of populism" in Europe. In most traders logic the Brexit should had caused a victory of Dutch far right party PVV (Gert Wilders) and should cause a victory of Marine LePen. The overall logic behind this story was to short European stockmarkets. This the rise of populism die not happened because voters in Europe turning away from populism, wich finally caused without any doubt the Brexit.

Two votes had been won by populists: The Brexit and the U.S. Election. Now lets have a look, how the latest approval rates are for Donald Trump:

MAR 30 2017: Majority of Americans think Trump's doing a poor job and the country is headed in the wrong direction: Poll
Source: cnbc.com/2017/03/30/poll-trumps-approval-rating-is-falling.html
Trump's approval rating slips to another new low, much lower than resent presidents at this point in their terms
Source: cnbc.com/2017/03/29/trumps-approval-rating-slips-to-another-new-low-much-lower-than-recent-presidents-at-this-point-in-their-terms.html

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Comment: APR 03 2017: German manufacturing growth reached an reached an almost six-year high in March, Markit's Purchasing Managers' Index (PMI) for manufacturing showed on Monday. Manufacturing activity in France and Italy also rose, adding to signs of a pickup in momentum in the global economy.
Source: investing.com/news/stock-market-news/stocks-start-second-quarter-on-firm-note,-u.s.-policy-in-focus-as-trump-xi-talks-loom-470565

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APR 04 2017: "Risk free trades against Europe on the rise of populism" vs. facts and figures

Quote: In recent polls, AfD (Germany´s far right party) has dropped dangerously close to the five percent threshold
Head of AfD, Frauke Petry (41), who has been under pressure within her Party, has now struck back – by indirectly threatening to step down
In recent polls, AfD has dropped dangerously close to the five percent threshold (currently seven percent, according to Allensbach). Without Petry, this might become even more of a tight squeeze. In the end, the party might fail to make it into parliament. Source: bild.de/politik/inland/frauke-petry/that-was-a-serious-challenge-51129132.bild.html

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APR 04 2017: Michael Hasenstab bets against euro in populist hedge

Quote: Michael Hasenstab is betting against the euro, a striking position for an investment manager celebrated in Europe for throwing the weight of Franklin Templeton’s flagship bond fund behind Ireland and Hungary as they emerged from the debt crisis. Speaking to the Financial Times, his comments highlight the concerns of many international investors, amplified following a campaign pledge from Marine Le Pen, presidential candidate of the far right in France’s upcoming presidential election, to withdraw the country from Europe’s single currency.
Quote: ft.com/content/bba626fa-0994-11e7-ac5a-903b21361b43

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APR 06 2017- Europe, Êconomy
Draghi says ECB's policy stance is still appropriate, too soon to reduce stimulus
Source: cnbc.com/2017/04/06/ecbs-draghi-says-monetary-policy-stance-is-still-appropriate.html

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APR 15 2017 - Italian Markets are politics driven. This chart is showing the evidence:

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APR 15 2017 - Rising volatility showing the fears in Europe. This chart is showing the rising volatility and rising bets against Europe direct following the French Presidential Election Opinion Polls

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: APR 24 2017: Angela Merkel reportedly had to explain the 'fundamentals' of EU trade to Trump 11 times
businessinsider.de/trump-trade-merkel-germany-eu-2017-4?r=US&IR=T

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APR 24 2017: Wall Street surges, Nasdaq hits record on French vote result
investing.com/news/stock-market-news/futures-rally-as-french-worries-ease

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Le Pen, Macron spar as French presidential race narrows slightly
investing.com/news/world-news/macron-campaign-for-french-presidency-off-to-slower-start-than-le-pen:-poll-477875

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Italy's Renzi regains party leadership with big primary win
investing.com/news/world-news/italy's-renzi-looks-set-to-regain-party-leadership-478837

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Exclusive: Portugal says economy growing faster than forecast investing.com/news/stock-market-news/exclusive:-portugal-says-economy-growing-faster-than-forecast-488109

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Polls suggest parliamentary majority within reach for France's Macron
reuters.com/article/us-france-election-idUSKCN18E07E

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Comment: UK could be heading towards hung parliament after general election, pollster predicts
YouGov predicts the Conservatives may win just 310 seats – 16 shy of an absolute majority
independent.co.uk/news/uk/politics/tory-majority-poll-election-2017-latest-labour-hung-parliament-seats-theresa-may-conservatives-a7764271.html