This week the market looks to have finally settled down, after prematurely declaring the same thing last week. While there have still been some big moves this week, they lacked any downward momentum and markets look like they will end up, bar any sudden swings in afternoon trading. While the volatility may have diminished, the background uncertainty hasn’t. A story that Theresa May had secured access to the single market for services was quickly rebutted, likewise a tweet from Donald Trump that he was close to a trade deal with China.
Elsewhere, elections in Brazil and Germany have the potential to dramatically shape their respective nations. Right wing firebrand Jair Bolsonaro won the Brazilian presidential election and while the market reacted favourably, if myopically, to his economic policy; he’s a divisive figure who may yet bring more instability to the country. In Germany, poor local election results have persuaded Angel Merkel to not seek re-election as chancellor in 2021, leaving a power vacuum in both Germany and Europe at a crucial moment.