Global markets may waver this week thanks to a host of issues. First, a bout of tension is flaring up in the Middle East as the OPEC top brass Saudi Arabia and other Arab states cut their diplomatic ties with Qatar accusing the latter of backing terrorism. Oil prices nosedived in apprehension that this strife may dismantle the effectiveness of the ongoing OPEC output cut deal.
Secondly, the fired Federal Bureau of Investigation Director James Comey is slated to testify in front of the Senate Intelligence Committee on Thursday.He was dismissed by Trump last month due to his inability to handle the investigation into Hillary Clinton’s emails properly.
Moreover, a snap election in the United Kingdom will be held on June 8. British Prime Minister Theresa May made a surprise announcement in mid-April to hold a snap general election this week, three years ahead of the 2020 schedule. Interference from opposition to pursue Brexit negotiations was behind this decision. With this election, May seeks to increase her party’s majority in the parliament. CurrencyShares British Pound Sterling ETF FXB and iShares MSCI United Kingdom EWU have thus gone into a high-alert mode and been trading with high volumes ahead of the polls.
Plus, on the same day, the ECB is scheduled to hold a policy meeting. Though investors are largely sure about the continuation of the ECB’s policy stance, some amount of uncertainty ahead of such an important meeting is understandable. If these were not enough, the Fed rate hike possibility in the mid-June meeting is quite ripe now. This can cause a short-term upheaval in the market.