Investors brace for ‘Super Thursday’ news events

A trifecta of potential market moving events will have investors’ attention on what is being billed as Super Thursday.

In addition to a relatively benign policy meeting at the European Central Bank, the day will also see parliamentary elections in the U.K. and the testimony of fired former FBI director James Comey before the U.S. Senate.

Comey is expected to provide new details about his conversations with Donald Trump, which could help prosecutors put together a case against the U.S. president.

Those hoping for an early bombshell were disappointed, however, as Comey released prepared opening remarks Wednesday afternoon that indicate he believes Trump was referring to an investigation of former national security adviser Michael Flynn and not a wider probe of Russia’s involvement in the U.S. election when the president told him to “let it go.”

Nevertheless, his testimony promises to be intriguing political theatre.

If Comey goes off script, or has other surprises in store, questions about the president’s future could be thrust further into the spotlight. That may raise more doubts about Trump’s policies, including broad tax reforms investors have been counting on and which have been reflected in strong equity prices since his victory in November.

“A lot of money was poured into the U.S. stock market in the hope that Trump would introduce banking reforms, tax cuts and infrastructure projects, and it has yet to be delivered,” said David Madden, a market analyst at CMC Markets U.K. “If the scandal erupts again, we could see a flight out of equities.”

Calling the situation heading into Thursday an “event risk trifecta,” Scotiabank’s chief FX strategist, Shaun Osborne, said he thinks the U.K. election will go right down to the wire, but the most likely outcome remains a Conservative win.

The party of Prime Minister Theresa May may not be considered business-friendly, but with polling numbers getting tighter in recent weeks, investors are concerned that Jeremy Corbyn’s leftleaning Labour Party could wind up in power.

Market participants also haven’t forgotten the surprise outcome of the EU referendum nearly a year ago.