Market wrap: Pound surges and European stocks drop

The British pound gained with bonds as Prime Minister Theresa May announced an early general election.

European stocks declined as traders caught up with a swathe of geopolitical events following the long weekend.

Sterling swung from gain to loss and back again versus the dollar before May set the vote for June 8. U.K. stocks fell by the most since January. Meanwhile, the Stoxx Europe 600 Index dropped to the lowest level in about three weeks as mining shares plunged, and government bonds in the region mostly rose as the build up to the French election intensified. Iron ore reeled as Citigroup Inc. said it’s bearish on the raw material’s outlook.

A bounce in U.S. stocks Monday failed to cheer investors in the European session, as the standoff over North Korea’s nuclear weapons program rumbles on and the French presidential vote looms. Two candidates who want to take the country out of Europe’s common currency remain in contention in the most unpredictable race in recent history.

“Expect a lot of noise and probably elevated volatility this week" as the first round of voting approaches, Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a note.

Source: Bloomberg

Trader Nikolay Georgiev

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