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The head of the IMF warns that the stability of the Euro threatened the elections in France – business video

All day economic and Financial news, as the head of the International monetary Fund warns of increasing uncertainty from the French presidential race

  • Latest: Lagarde in France
  • The head of the IMF thinks election models huge question mark’
  • Euro on the slide, if Le Pen or Mélenchon wins
  • Markets worried about France, North Korea, Turkey….
  • Tonight: the world economy, the IMF at 2 PM BST

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IMF chief warns that euro stability is threatened by French election – business live

6.08 am EDT
06:08

It’s official! Theresa may has called for General elections on 8 June.

Sterling has actually recovered its recent losses and returned to $1.257 against the U.S. dollar.

Full coverage here:

Updated
6.09 am EDT

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6.00 am EDT
06:00

Vice-President of the company fxtm market research, Jamil Ahmad, sums up the mood in the city now:

There was some sudden selling in the British pound over the last few minutes after the news that the Prime Minister Theresa may will speak in the next hour.

There are unconfirmed rumors at this stage, the rumors that Theresa may to resign, while there are other reports that it may be associated with the announcement of elections in the UK.

The truth is, no one is really that aware of what was happening, but this uncertainty has caused a reaction in sterling.

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5.53 am EDT
05:53

Money is also pouring into UK government bonds as nervous investors awaited to hear the statement by Theresa may.

This contributed to the fact that the cost of UK debt, sending the yield (or interest rate) on 10-year bonds up to a six-month low.

lemasabachthani
(@lemasabachthani)

*IN THE UK, THE YIELD ON 10-YEAR FALLS BELOW 1%; FIRST TIME SINCE OCTOBER

18 APR 2017

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5.27 am EDT
05:27

Pound falls before the statement by Theresa may

Back in town, the pound fell sharply after news that Prime Minister Theresa may will make a surprise announcement at 11.15.

In Westminster rumours into Overdrive, with speculation of early General elections. And that pulled sterling back to $1.25, reaching a three-week high this morning.

IMF chief warns that euro stability is threatened by French election – business live

No one knows what’s going on, which is another reason to sell the pound….

Joshua Raymond
(@Josh_RaymondUK)

The current rumors about the announcement of the evening:

1. Early Elections
2. The Prime Minister resigned for health reasons
3. Nobody has a clue# £

18 APR 2017

Our politics liveblogger Andrew Sparrow is on the case:

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4.54 am EDT
04:54

On the other hand, the Euro could rally if the French voters to plump for a more mainstream candidate.

Kathleen Brooks from city Index predicts ‘rally’ if marine Le Pen will be eliminated in the first round of voting on Sunday.

She writes:

With marine Le Pen is the most Euro-toxic of all the candidates, we can assume that in the first round of elimination before the National party could lead to a Euro rally in a week. We mentioned in our previous article on the elections in France, françois Fillon that the candidate deserves a second look. He has a solid block of conservative voters, the number of which may be swollen if it is a new in the Le Pen from the Elysee Palace. Added to that, the French voters surprisingly not immune from scandals such as those that have plagued the candidacy of Fillon.

Although the last chance continues to provide independent Emmanuel macron a healthy chance to win in may, his chances dropped as Fillon and the far-left Jean-Luc Mélenchon, the candidate grew up. If we get Makron/ Fillon second round, it can be considered a “market environment”, triggering a rally in the Euro on SAS, but in the German DAX and eurostoxx index, which had a decent correlation with French bonds yield this year.

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4.45 am EDT
04:45

Trader: the French elections could drive the Euro down to parity with the dollar

IMF chief warns that euro stability is threatened by French election – business live

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3.47 am EDT
03:47

Lagarde: the French election weighs on confidence and stability in the Euro area

IMF chief warns that euro stability is threatened by French election – business live

Further, Pyongyang’s latest (failed) missile test was of particular interest to investors – particularly as a high-ranking official of the DPRK warned that “nuclear war could break out at any moment.”

Naeem Aslam from think markets believes that investors are looking for Washington reaction (Vice-President Mike Pence in South Korea today).

North Korea is faced with another failure in nuclear tests and investors are wondering what will be the reaction from the United States and its allies. The demand for other safe-haven assets also picked up in light of this, the price of gold is moving closer to our goal of $1300.

We are sitting near five months. When it comes to the price of gold, we believe that the pulse can easily continue and bias remain skewed for more to move up.

Chris Weston, chief market strategist of IG in Melbourne, said:

“I think the focus is now firmly on the future missile tests of North Korea and whether any future tests will actually be successful. One suspects that the problems in North Korea continues to play.”

The Turkish Lira, meanwhile, rose after the President of Turkey Recep Tayyip Erdogan claimed a narrow and contested victory in the referendum to change the Constitution of Turkey into a presidential Republic.

The Lira was up 2% against the US dollar yesterday as investors calculate that Erdogan’s win means a reduction in political instability. It will definitely give him new powers; critics fear more authoritarianism and subsequent repression against opponents of the President.

The legitimacy of the result is questioned – more than 1 million votes without official seals were included. That didn’t stop Donald trump giving Erdogan congratulations, by the way…..

IG predicts that the London stock market will fall in early trading, but other European markets are expected to increase.

IGSquawk
(@IGSquawk)

Our European opening calls: FTSE$7313 -0.20%
$12134 DAX +0.21%
$CAC 5086 +0.29%$CAPRICORN 10363 +0.36%$19818 MIB +0.23%

18 APR 2017

On the agenda today….

The international monetary Fund will release its latest assessment of the global economy today, 2 p.m. British summer time (or 9 am Washington time).

This is a chance of the IMF for upgrading or downgrading their growth forecasts and indications of problems in the world economy. Last week IMF chief, Christine Lagarde hinted that the Outlook for global growth may be revised upwards, despite their concerns about protectionist trade policy was Donald trump.

We will track all the major events during the day….

Updated
at 3: 47 am EDT

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