After a period of smooth trade and low volatility in the global financial markets, politics again aroused a lot of emotions. Donald Trump who reportedly abused his power and disclosed state secrets was in the spotlight. The information not only had a negative impact on the image of the US president, but it may also be the source of subsequent disputes and divisions in Congress. This has been a significant risk factor for the market, as the issue of the Donald Trump’s economic reforms implementation has seemed increasingly questionable. Therefore, it was not a surprise that major global stock market indices ended the last week in negative territory. During the whole week, the NASDAQ fell by 0.6%, the DJI and the S&P500 went down by 0.4%.

After Emmanuel Macron had won the race to the French presidential chair, the political risk definitely lost its importance. As a result, the volatility in major financial markets shrank significantly. During the whole week, German DAX increased by 0.4%, British FTSE50 grew by 0.3%, while French CAC40 declined by 0.5%. In the US, the NASDAQ rose by 0.3%, whereas the DJI went down by 0.5% and the S&P500 fell by 0.4%. The monetary policy of the most important central banks was in the spotlight, especially since the macroeconomic data from the US and the Euroland was quite robust. Last week, investors focused on the numerous public appearances of the Fed’s representatives.

In the first week of May major global stock market indices were dominated by the green color. During the whole past week, French CAC40 rose by 3.1%, German DAX increased by 2.2% and British FTSE250 went up by 0.4%. In the US, the NASDAQ took off by 0.9%, the S&P500 soared by 0.6% and DJI grew by 0.3%. The market focused on the FOMC meeting last week. In line with expectations, the interest rates remained unchanged. Nonetheless, neither the Fed statement nor the public commentaries of the bank representatives were too much interesting. What is more, these did not concern the shape of the future monetary policy.

Last week, the global market sentiment was definitely bullish. During the whole week, French CAC40 grew by 4.1%, German DAX went up by 3.2% and British FTSE250 increased by 1.3%. In the US, the NASDAQ took off by 2.3%, the DJI soared by 1.9% and the S&P500 rose by 1.5%. The results of the first round of the presidential elections in France turned out to be a source of good moods in the financial markets. In line with market expectations, Marine Le Pen and Emmanuel Macron will be fighting for the presidential chair. Nonetheless, it cannot be ruled out that the bullish reaction of the market was only a short – term effect, especially since polls have showed that Macron have had about 20 percentage points advantage over Le Pen.

Due to the significant political risk, investors returned from Easter in mixed moods. The American stock market indices liked the green color last week – the NASDAQ increased by 1.8%, the S&P500 soared by 0.8% and the DJI rose by 0.5%. Certainly, this was an effect of the solid condition of the US economy. Moreover, the geopolitical situation in North Korea remained stable, although still tense. However, due to the political risk in France, the European stock market sentiment was quite bearish. Recent pre – election polls showed that the fight for the French presidential chair will be extremely fierce. In fact, there were only four major candidates. Each of them could count on about 20% of support. It generated a risk that Mélenchon and Le Pen would be in the second round of elections – this would be the worst possible scenario for the market, because the French would have to choose eurosceptic Le Pen or Mélenchon - the man with the communist views.