It’s going to be a hot summer

After a first half marked by low volatility, particularly in the stock and foreign exchange markets, volatility could well rise again in the second half due to political uncertainties in France and indirectly in Europe, with the prospect of a higher public deficit and potential tensions with the European Commission. In the United States, there is also political uncertainty surrounding the outcome of the US presidential elections in November. Democratic President Joe Biden looked weak during the debate with Donald Trump and is trailing the former President in the polls. These political uncertainties come at a time when stock markets are fragile due to high valuations and the Fed’s relatively cautious monetary policy. This environment suggests that it’s going to be a hot summer.