Conservatives securing a surprising majority in the U.K. parliament helped push markets higher, towards the end of last week's session. Unsurprisingly, signs of relief were mostly evident in the U.K. – yields in the U.K. lost about 8bp, as they hovered around 1.85% at the start of Friday's session, while the German 10 year bund was not far behind with approx. 7bp loss. Equity's response to the political news was exceptionally rabid. The FTSE 100 added over 2% at the start of Friday's session. Equity in Europe followed as the DAX opened Friday's session with close to a percentage point gain, and the CAC 40 started the day not too far behind that.

In addition to the positive European momentum, the U.S. Friday session also gained from an April Nonfarm Payrolls report, which indicated a 223K jobs gain, just a tad shy of the analyst consensus of 228K. To a great extent, this print can be seen as a particularly good one, if only due the fact that it is so close to the consensus. A weak April print would have suggested that the negative March 126K print is the result of persistent, rather than transient factors, and so the U.S. economy isn't in the good shape people thought of until now. A too high print, say ~250K and up, could have translated to expectations that the Fed would wish to see the first rate hike in June's decision, thus trimming expectations that U.S. firms should enjoy several more months of record low-cost financing. With this dual power-up, the S&P (SPY) opened Friday by flashing about a percentage point higher. The Dow Jones (DIA) hovered at around 1.3%-1.4% increase though the daily session, concluding it at a 1.5% gain.

Zoom out, and it's gone

When zooming out to a weekly perspective, quite a few of the swings by the end of the week are canceled out, by moves at the beginning of it. This sort of makes sense given that both the result of the U.K. elections, as well as the U.S. Nonfarm primarily dissolved concerns building up until that point. EUR/USD is a particularly good example of this, with a 1.7% gain prior to Thursday's intra-day high of nearly 1.14, going back down to finish the week with negligible change. Similarly, EUR/GBP also peaked on Thursday, with a 1.2% gain. The Conservative win, however, translated to a stronger backlash here, ending the week with the Sterling strengthening by close to 2%, during the week.

Similar results can be spotted in equity markets. The S&P500 lost close to 2% before Wednesday's low point. Hence, gains from the point onward only managed to secure a 0.4% weekly increase for the index. Similarly, the NASDAQ (QQQ) lost about 2.3% before hitting the weekly low, on Wednesday, but managed to conclude the week with a rather negligible -0.04% loss. Likewise, the FTSE 100 lost more than 2.1% before Thursday's low of 6810.05 points, which, after Friday's rally, measures to a moderated 1.2% weekly increase.