Markets keep an eye on the French election polls
The Euro and the French Elections
The Euro started the week strong after incumbent French President Emmanuel Macron won a larger than expected share in the French election's first round. Against Marine Le Pen, Macron gathered 27.41%, leaving her with 24.03% out of the 96 votes.
Investors have been wary of a far-rightist candidate that could change everything when it comes to her candidacy in the EU. Especially after losing by only 2 votes back in 2017, despite the controversy regarding her political views on immigration, Islam, and Euroscepticism. Placing further pressure on global markets, in addition to the continuous sell-off in Europe’s government bonds and U.S. treasuries.
The Euro left its 1.08 level to climb as high as $1.095 while the French 10-year bond yields also jumped to their highest level since 2015 from 1.275% to 1.296%. The RSI indicator has also moved above levels of 50 indicating the strength of a leftist win and the reversal of the sell-off momentum into a more bullish phase.
Markets will be quick to price in the risks of a rightist win though, therefore sentiment remains cautious at least until April 24th. Although In light of central banks trying to curb inflation and shift their monetary policies, cautious sentiment might be here to stay.
