Financial markets face new geopolitical equations.
Global financial markets face new geopolitical equations between global economies that may lead to the formation of new independent blocs, drawing a different roadmap for major currencies with the USD expected to remain the strongest.
A new geopolitical map could produce three major independent poles; the US, China and the European position will be based on Brexit and perhaps a new Russian-European alliance in the making, thus a positive impact in the cards for the Euro.
Under this new reality, America’s first priority will be to reduce the US trade deficit with China, with talks of $200 billion reduction from China’s side but the picture will be clearer after the forthcoming Korea-US summit, taking place on June 12, 2018. China will protect its interests and explore new markets whilst on the other hand, French president Macron will continue to work for a unified strong Europe, independent in its decisions and serving its economic interests away from the US.
Positive developments will be reflected in the Eurozone if Macron manages to make a new alliance with Russia as inflation levels reached close to its target in addition to positive inflation data in Germany which surprised the markets reaching its highest in six months.