The French Presidential Election result provided an emphatic win for Emmanuel Macron over the more controversial far right candidate, Marine Le Pen. It means investors have been able to breathe a sigh of relief and with the result widely expected, the markets have already priced in the outcome.
Spreadex Analyst, Connor Campbell commented – “While the euro managed to cross the $1.10 as the results came in yesterday evening that growth didn’t last very long, the currency now back below that half a year high against the dollar. The euro also lost ground against the pound, shedding 0.2% to graze 0.845 for the first time since last Wednesday. This sense of calm also took hold of the indices. Having hit a fresh 9 and a half year peak during overnight trading the CAC hasn’t looked too enthusiastic since the day began, falling back under 5400 as investors mull over the economic and political challenges facing the newly anointed President. The DAX was the same; at one point spiking to nearly 12900 the German index has had to settle for a flat, 12700 start to the session.
Like its Eurozone peers the FTSE appeared to use up all its Macron-energy at the end of last week, leaving it unchanged after the bell, a smidge away from 7300.”
With the French election out of the way, the long-term outlook for the euro and the Eurozone remains positive. LCG Analyst, Ipek Ozkardeskaya suggested – “The attention will now shift to the German election, which however doesn’t carry similar risks vis-à-vis the integrity of the Europe’s monetary and economic union.”
US indices finished last week on the front foot heading into the weekend’s French election as investors traded the risk-on atmosphere that the expected Macron victory provided and reacted to a strong Non-Farm Payrolls print.
Accendo Markets Analyst, Mike van Dulken noted – “Both the S&P 500 and Nasdaq notched fresh record highs as investors reacted to the mixed US jobs report, while the rebound in crude oil prices helped the energy sector to outperform on the former. The Dow Jones underperformed peers, however also closed higher with DuPont leading risers.”