Opening Bell: Global Politics Set To Roil Markets As Week Begins

 | Feb 06, 2017 06:06AM ET

by Eli Wright

With President Trump continuing to clash with US lawmakers over his proposed immigration ban, France's April presidential election campaign heating up and the UK parliament beginning its 3-day debate today over legislation giving PM Theresa May the power to trigger Article 50 and begin Brexit in earnest, key global market drivers will likely be political as the trading week begins.

Early Sunday morning, the Ninth Circuit Court of Appeals denied a request from the Justice Department to restore Trump's executive order after a federal judge in Seattle issued a restraining order on Friday saying the ban could not be enforced. Also yesterday, France’s far-right leader Marine Le Pen officially declared her candidacy, delivering a speech attacking globalization and immigration, and promising a referendum on EU membership – what's come to be known as Frexit.

This morning, as Article 50 negotiations begin in the UK, Prime Minister May could face recent poll of UK business leaders, "58% percent believe their business is already suffering from the UK's decision to leave the European Union."

Overnight in Asia, equities saw modest gains. The Nikkei rose 0.31%, to 18,976.71; the Shanghai Composite finished 0.55% higher, at 3,157.37; and the Hang Seng gained 0.9%, to 23,338.

In Europe, markets are mixed. The FTSE is clinging to a 0.11% gain, at 7,196.25. However the DAX is down 0.54% at 11,588; and the Stoxx 50 is 0.35% lower, at 3,266.50.

On Wall Street, major indices finished higher on Friday propelled by Trump's executive order to roll back Dodd-Frank regulations. The Dow crossed back over the 20K line, up 0.94% to 20,071.46; the S&P 500 gained 0.73%, to 2,297.42; and the NASDAQ closed up 0.54%, at 5,666.77. Both the NASDAQ and NASDAQ 100 are now close to new all-time highs.

In pre-market trading, however, the Dow is flat; the S&P is down 0.04%, and the NASDAQ has slipped 0.11%.

US Treasurys have fallen across the board: the 2-year yield is 1.185%; the 10-year yield is 2.452%; and the 30-year yield is 3.084%.

h3 Forex/h3

Despite Friday’s US jobs report showing disappointing wage growth and an uptick in unemployment, the headline number showed 227K new jobs, which has contributed to this morning’s dollar gain. The greenback is currently up 0.1% at 99.96. However, longer term, its outlook is testing bullish stamina.