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Analysis

European Elections 2024

News & Analysis

 

The European Parliament elections in 2024 will define how the EU’s political direction is headed over the next five years. Though these elections are not a major market event, their outcome will have some impact on trade policies and economic integration within and beyond the Eurozone, which can affect various financial markets. Learn how the European elections work and how to prepare your portfolio this year.

 

When will the European elections take place?


From the 6 to 9 June 2024 the European Union goes to the polls to elect a new European parliament. European elections take place every five years, and with over 400 million eligible voters, they are the second largest democratic elections in the world, after India’s. After the 2024 election, there will be 720 seats available, with proportional representation within each country assigned to several MEPs according to its population.

The role of the EU parliament


The next European elections could be significant: the EU has been at the centre of major market events in recent times, with the 2012 Euro crisis and Brexit in 2016 as just two of the most famous examples. MEPs do not have the right to propose legislation, but they do vote on it, with the European Commission (an international civil service) and Council of Europe (a collection of ministers from national governments, with a rotating presidency) the other main branches of the European government.

Trade and FX markets


Because the European Parliament is not the sole executive power in the EU – national governments and the European Commission are more significant in determining policy – parliamentary elections have a reduced market impact. However, significant changes in the composition of the European Parliament are closely watched by analysts, as they could lead to changes in the EU’s attitude to trade. The main market to watch is FX, as well as bond markets.

EU Elections: Key dates for traders

From 6 to 9 June 2024, the European Union runs a coordinated series of elections, one taking place in each member state, to elect a new European parliament.

EU Elections: How to trade the financial markets

Election impacts are uncertain, but the 2024 European elections may cause volatility in European stocks and the Euro, especially if fringe parties perform well or results are indecisive.

EU Elections: Five stocks and indices to watch

Stock markets across the continent, the Euro, and currency pairs of non-Euro EU member states are all on the list for potential volatility after the election.

EU Elections: Likely outcomes and market response

Traders dealing in European markets need to pay attention to the 2024 elections. For European markets, including stocks, bonds, and currencies, a big election can mean big volatility.

How the European elections work

Groupings with the EU Parliament


National political parties run lists for each EU election, and to act coherently once elected to parliament, they form international groups, or lists. The largest lists in the 2019 to 2024 Parliament are the EPP (a centre-right conservative group), S&D (a centre-left group of social democrats) and Renew (a centrist liberal group). All three of these groups consist of parties seen as moderate and pro-business. The success of these parties in 2024 will be seen as an endorsement of the status quo.

Outside of the main three lists, the next most important groups are the Greens (a left-wing liberal group), ECR (a right-wing conservative group), ID (a far-right nationalist group), and Left (a far-left socialist group). After these come the ‘non-inscrits’ NI, MEPs who either didn’t want to join a group, or weren’t allowed into one.

Euroscepticism and radical groupings


All these smaller groups are seen as more radical, like ECR and ID, who are known for their Euroscepticism, and others that wish to leave the European Union. Big successes by any of these groups could add to market volatility around the election, perhaps weakening the Euro and possibly key European stocks too. In recent years these groups have performed well and are predicted to make large gains in 2024, as seen here on Europe Elects’ polling tracker.

How to trade the EU elections

Polling and likely market results


EU election results tend to follow polling very closely, and upsets are rare. Long-term trends seen in polling for the 2024 election will likely already be priced into markets because their key findings have not changed in recent years. The expected changes between 2020 and 2024 are as follows:

  • Major gains for ECR and ID.
  • Big losses for centrist parties including Renew and S&D.
  • Losses for Greens and gains for Left.

Because this result is expected, the market reaction will likely be limited. However, significant projected gains by ID will be seen as destabilising for the European Union, likely resulting in Euro losses. Some forex traders may look to hedge open EUR positions in the run-up to the elections, hoping to limit losses during any potential market volatility. A better-than-expected showing by Left could also cause drops in stocks, as they are seen as an anti-business group.

Why trade the European elections with ADSS?

We offer CFD trading on instruments from financial markets that are likely to be impacted by the European parliamentary elections.

Stay up to date with market developments with price alerts.

Go long or short on European equities and commodities with CFDs.

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Preparing your portfolio


Volatility is an opportunity for CFD traders – we need it to find profitable opportunities. But it is important to know which assets will be impacted by different groups performing well in the next European elections, as well as how.

The European election market impact is not as dramatic as those seen following the US Presidential elections or eventhe UK general elections, because the power of the European Parliament is more limited and less direct. Even so, traders who deal in European assets, such as stocks, indices, commodities, and of course any FX pairs involving the Euro, need to have an understanding of this upcoming election, and how it might impact your portfolio.

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FAQs

When will the EU elections take place?

The European Union will hold its parliamentary elections from 6 to 9 June 2024. These EU elections occur every five years, involving over 400 million eligible voters.

How do European elections impact financial markets?

Although the next European elections typically have a limited market impact, they can influence trade policies and economic integration within the Eurozone. The European election market impact is most significant in FX and bond markets. Significant changes in the composition of the Parliament, particularly gains by Eurosceptic or fringe parties, could lead to increased market volatility and affect the Euro and key European stocks.

Which political groups are expected to gain or lose seats in the 2024 European elections?

Current polling suggests major gains for the ECR and ID groups and losses for centrist parties such as Renew and S&D. The Greens are also expected to lose seats, while the Left is projected to make gains. Despite these shifts, a majority of centrist parties is still anticipated, limiting the overall impact on EU policies.


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