The World appears to be going through a significant shift in political sentiment with the rise of right-wing parties and anti-establishment rhetoric. What seemed like an almost impossible campaign for Donald Trump, according to the polls that put Hillary Clinton comfortable ahead of the Republican for the entirety of the race, was in fact Brexit 2.0.
Yet again, the polls had it wrong and so did the markets, and there is no reason to believe this anti-establishment movement will halt momentum.
Italy’s Referendum and the rise of the 5-Star Movement
Italy, a heavily anti-EU nation is holding a crucial Referendum on December 4th which looks at curbing the role of the upper house Senate. If Renzi loses the Referendum, he will resign as Prime Minister. Italy’s 5-star movement, a far right wing political party is heading the polls and could win in the event of snap election.
Brexit is like a catalyst, and it could be only a matter of time until others follow suit.
Could the UK get a free trade deal with the US?
The Pound has made noticeable gains against the Euro since yesterday, and given that no positive news regarding Brexit has emerged, are markets beginning to see the silver lining with Trump?
Trump supports Brexit and thus a trade deal with the UK, Theresa May throughout the US elections kept her opinion mute on Trump, which may work in her favour when it comes to the negotiation table.
European elections next year could throw out further surprises
Given the recent surprises with Brexit and now Trump, the French, German and Dutch elections next year could pave the way for new political powers. Angela Merkel’s rating has dropped significantly in recent months, due in most part to the disapproval of her refugee quota.
France have also had their problems, terrorist attacks at the hands of Islamic extremists have heightened fear giving Marine Le Pen a chance at Presidency. Her appeal to curb immigration is gaining momentum in the wake of a Trump victory, promising a ban on the Islamic Veil and a Referendum on EU membership.
Next year will be a critical year for the Eurozone, a year that could change the direction of the single market forever.