• UK snap election bolsters GBP
  • US political divide
  • Global risk rises
  • US-China trade refocus

British PM Theresa May welcomed back London’s financial markets from their 4-day Easter break with a surprise, and it wasn’t the kind you find in an Easter egg. May is calling for a snap election on June 8th. The Prime Minister is concerned that Parliament is undermining the UK’s negotiating position in leaving the EU. May has a significant lead in the polls, and could be looking to leverage the vote in order to gain a sizeable majority for her party; however, investors are taking this as a chance that “soft Brexit” could be on the table again and sent the pound soaring and GBP/USD to the highest level this year.

The yen making a reluctant move higher as the Prime Minister’s announcement adds another line on the laundry list of unknowns. The first round of the French elections is just five days away, and as North Korea vows to continue missile testing investors are likely to keep their foot on the break when it comes to risky bets. The South Korean won is coming under pressure amid the noise to the north, down almost 0.9% against the USD.

Political derision seems to be deepening in the US. Georgia’s 6th Congressional District, a historically Republican district, is holding a special election after Trump tagged their former Representative Tom Price as Health Secretary, opening up the seat. But while the district has not elected a Democrat in decades, a 30-year-old former congressional staffer Jon Ossoff has more than $8.3 million and may be poised to throw a wrench in the works.

While diplomatic waters between the US and China are warming up, US businesses aren’t letting their interest fall by the wayside. A US business lobby warned that 2017 could be a tough year for US businesses, asking Washington to use “everything you have in your quiver” to level the playing field with China. While nobody wants a trade war, this could reflect a larger unease after Trump tweeted that China would have a better trade deal if they helped the US resolve the issues with Pyongyang.

EURUSD:  Euro higher on USD weakness as Macron and Le Pen remain the most likely finalists in the first round of the presidential elections.

GBPUSD: Resurgent hopes for a “soft Brexit” pushing cable to the highest levels since December 2016 after Theresa May’s call for an early election this morning.

AUDUSD:  Aussie dollar the worst performer among the G10 currencies after iron ore sunk to a near 6-month low.

USDCAD:  Canadian dollar weaker against the greenback even as oil prices rebound due to lack of risk appetite.

USDJPY:  Yen higher after a bumpy session overnight, reaping the benefits of safe haven flows as risk-off sentiment abounds.