“The fall of the Assad regime in Syria is negative for its allies, Russia and Iran, and could lead to further instability in Syria, as happened after the departure of Gaddafi in Libya. But since this country doesn’t produce a lot of oil, I don’t see a major impact. in global markets,” Oliver said.
According to Russian media, Bashar al-Assad is in Moscow after rebels seized Damascus over the weekend, ending 50 years of Assad family rule.
In France, the political landscape took a dramatic turn with the fall of the government following a vote of no confidence in Parliament last week.
Prime Minister Michel Barnier’s failure to pass the austerity budget required by EU rules led to the collapse, exacerbating tensions with the far-right opposition. However, President Emmanuel Macron is moving quickly to appoint a new prime minister, easing fears of a government shutdown.
Oliver explained that in this situation, despite the uncertainty, French bond yield spreads have remained stable and that analysts see no signs of contagion to the Eurozone similar to the crisis a decade ago.
“So far, the spread between French and German bond yields has returned to the range it has been in since the mid-year elections and there are no signs of contagion to other members of the zone euro like Italy and Spain,” said the chief economist.
“And compared to the period 2010-2012, growth is stronger, financial conditions are easier and the ECB has more room for easing, so this does not look like a repeat of the zone crisis euro of the last decade.”
Acknowledging Germany’s “political dramas”, Oliver pointed out that its budget deficit is less than 3 percent of gross domestic product and noted that next year’s elections are expected to result in a transfer of power to the CDU/ Center-right CSU.
“Uncertainty will likely weigh on French growth, which is another reason to expect relatively aggressive rate cuts from the ECB – probably up to 1.5% next year,” he said. he declared.
South Korea, by contrast, descended into a comparable crisis last week after its president, Yoon Suk-yeol, briefly declared martial law amid falling approval ratings. The decision was quickly overturned by Parliament.
Although political uncertainty in Korea could weigh on the economy, Oliver said the Bank of Korea was ready to intervene if necessary.
“So far, democratic institutions have held up and are unlikely to have a major impact beyond the political uncertainty weighing on the Korean economy,” Oliver said.
“Although Korean stocks have fallen, this has been only modest and the Bank of Korea is likely to provide support if needed, although this seems unlikely,” he added.
Overall, Oliver believes that global developments are unlikely to have a significant impact on global markets.
“I don’t see a huge impact, to be honest,” he said.
Bitcoin maintains its strength
The price of bitcoin has continued to rise amid growing global unrest, surpassing the $100,000 mark last week. Since then, it has remained strong, hovering between $100,000 and $102,000 for several days.
As bitcoin hit a new all-time high last week, deVere Group CEO Nigel Green noted that political turmoil in France and South Korea is reigniting global discussions about decentralized, non-government-backed currencies like bitcoin.
“When governments falter or act unpredictably, people inevitably look for alternatives that do not rely on institutional trust. This is where decentralized currencies come in,” Green said.
He predicted that the current political unrest will likely accelerate the adoption of digital currencies in Europe and Asia, in particular.
“The results in both countries will undoubtedly shape global market sentiment and policy decisions in the weeks and months to come,” Green said.
The Bitcoin price stood at US$101,219.30 at 11:00 AEST.
