The current favourite in the race for Number 10 is former Foreign Minister Boris Johnson. Market insiders believe that May’s resignation could help speed up the process of the government securing cross-party support for any final EU withdrawal plan. This comes at a time when the risk of a “no deal” Brexit is looming increasingly large with each day that passes. Elsewhere, European investors are also concerned that May's departure will make it difficult for the Bank of England to maintain its high base rate policy, thus increasing the likelihood of a reduction. Another key area of interest is the still-unresolved US-China trade conflict, which has only been intensifying of late. Despite US President Donald Trump's statement that the US's allegations of irregularities against Chinese company Huawei can be resolved by way of a trade deal, investors are still worried that the parties will be unable to reach any kind of agreement. The next meeting between the two countries' respective heads of state is set to take place as part of the G20 meeting in Japan next month. In regional corporate news, we have received reports that a Renault and Fiat Chrysler merger could be on the cards. In fact, the two companies are allegedly discussing the terms of the potential fifty-fifty merger as we speak.
European investors are still assessing the medium-to-short term implications of British PM Theresa May’s announcement that she will be stepping down come 7 June.