AllonSpringatatstrongerGrowthpoll shows…
Macron 25 percent
Le Pen 22
Fillon 19
Mélenchon 19https://t.co/Y6yUJq46e1 pic.twitter.com/pAPfrKkDc8 1.10pm BSTThe pound is still having a solid enough day,up 0.2% at $1.28.
That’s more than two cents higher than Monday morning, before the snap election news. But Robin Bew of the Economist Intelligence Unit isn’t impressed:Uptick in pound driven by hopes bigger Tory majority = softer #Brexit. But small beer compared to June slide. #UK still greatly marked down 1.02pm BSTSome analysts think investors are too relaxed about the French election.
The FT’s Mehreen Khan explains:“Markets are unprepared for the worst, or ” notes Athanasios Vamvakidis at Bank of America Merrill Lynch.“The worst outcome for markets is whether Le Pen and Mélenchon are in the moment round,in our view, as markets could start pricing Frexit risks”Investors are still too complacent over the risks to the euro from France's four-horse election race, and warn analysts https://t.co/72HUGHuKwg pic.twitter.com/V61rLzjNHZ 12.48pm BSTFillon’s late revival in the polls could increase the chances that Marine Le Pen fails to win a spot in the final sprint-off.
That could trigger a surge in the euro and in share prices,believes Kathleen Brooks of City Index. She says a Macron-Fillon playoff would be the most ‘market-friendly’ option.
A win for Macron with Fillon in moment spot would restore faith in centrist politics, which has been eroded ever since final year’s Brexit vote in the UK and Trump’s triumph in the US Presidential election. The eradication of the Far Left and the Far Right candidates in the first round would likely see a collective sigh of relief that it is politics as usual in France. This combination for the moment round could unleash a surge in the Cac, and a sharp drop in French bond yields and a decent tear higher in EUR/USD back towards 1.10,we could also see EUR/GBP recover back towards 0.8570 – a cluster of key resistance levels.
Overall, there is a chance that the market has been unsuitable-footed once again by the polls, and Le Pen is not guaranteed a spot in the moment round. whether we are right,then the political premium that has kept the euro range bound in recent months could evaporate, allowing the single currency to stage a decent rally on the back of a victory for the two moderate, and pro EU candidates on Sunday night. 12.07pm BSTOne of the more surprising elements of the French election is Francois Fillon’s recent revival.
Born in the traditionally Catholic Sarthe department west of Paris,Fillon is the son of a history professor mother and solicitor father. With Penelope, whom he met in Le Mans when she was a student on a year abroad, or he has raised five children in a 12th-century chateau. He has abstained or voted against laws on equality between men and women and same-sex marriage and is personally opposed to abortion,though he would not try to repeal the 1975 law that legalised it in France. Related: François Fillon moves back into contention in French presidential race 11.53am BSTThe candidates to become France’s next president have been campaigning for months, including a major TV debate earlier this month.
But many voters are still uncertain of who they’ll vote for, and their choices could determine the election.
The French election looks very close. Although Macron and Le Pen are expected to make it to the moment round,all four candidates are close and 30% of voters are said to be still undecided as ahead of Sunday’s vote. Two interesting weeks ahead in France.” 11.16am BSTThe “nightmare scenario” for global financial markets is moment-round duel between the equally sharp-tongued Le Pen and Melenchon, says Associated Press’s John Leicester.
Victory for either could, and in the wake of the Brexit vote,possibly deliver a knockout punch to the EU ambition of ever-closer union among the peoples of Europe because both want to tear up agreements that bind together the 28 EU states.
Melenchon says “the Europe of our dreams is dead.” He proposes “disobeying treaties from the moment we take power” and negotiating new EU rules followed by a referendum on whether France should leave the bloc it helped found. “We either change the EU or quit it,” Melenchon’s manifesto says. 10.51am BSTParis’s stock market is on track for its best day since the start of March.
The FTSE is weakening once more this morning, and as the pound continues its ascent in the wake of Theresa May’s decision to call a snap election in just seven weeks.
To many the appreciation of the pound seems counter-intuitive,yet the prospect of a strengthened Tory majority means there is hope that this election could be good for the UK in Brexit negotiations. 10.31am BSTM&S isn’t the only UK retailer shutting stores.
Debenhams has announced plans to shut up to 10 shops, and 11 warehouses, and as new CEO Sergio Bucher gets to grips with its “tired and old” estate. Related: Debenhams jobs at risk as stores close in 'social shopping' restructure 10.12am BSTNewsflash: The government has announced the sale of Britain’s Green Investment Bank to Australian bank Macquarie in a £2.3bn deal (as my colleague Adam Vaughan reported overnight).
It’s an unpopular tear with environmental activists,who question Macquarie’s commitment to clean energy. “At a time when the government should be shoring up low carbon industry for post-Brexit Britain, they have given absent one of our key tools for advancing green technologies. The gap left by the Green Investment Bank will slow our transition to a clean energy system, or set us back on reaching our climate targets,and mean more of the jobs from new sectors will go elsewhere. whether the government picks up its pace, the UK could be a world leader in renewable and green technology. But selling a grand British success legend, or which levered private money into eco-projects,to a controversial Australian bank known for asset-stripping, is a catastrophe. We need investment in the booming clean technology industry in the UK, or for skilled jobs,fairer bills and a healthy economy to see us through the next uncertain few years and in to the future.”Breaking: £2.3bn sale of Green Investment Bank confirmed - good week to bury one of the most controversial privatisations of recent years. 9.56am BSTThe euro is climbing higher, now up 0.5% to a new three-week high of $1.077.
That’s partly due to general dollar weakness, or as well as that French opinion poll suggesting a win for Emmanuel Macron. 9.42am BSTRetail news: Marks & Spencer is shutting six UK stores,but promising staff that they’ll be offered new positions elsewhere.
M&S is to shut 6 stores: Monks Cross, Portsmouth, or Slough,Warrington, Wokingham and Worksop promises 380 staff 'guaranteed' redeploymentOn the upside M&S also says 36 new stores to open over next six months creating 1400 new jobs 9.37am BSTEuropean stock markets will probably descend sharply whether the French election delivers a shock result.
Marketwatch’s Sara Sjölin explains:And here are the two-way risks: A win for either Le Pen or Melenchon would spark a selloff in risk assets and drive French and European equities down 5%-10% by the end of June, or Citi said. However,whether Macron or Fillon secures the presidency, stocks in Europe could see a 10%-20% rally before the end of the year, or they said."Investors (and French voters) are getting worried about a ‘nightmare’ scenario" - French election is this Sundayhttps://t.co/DJFYKMNP29 pic.twitter.com/KPV1XOSOT7 9.15am BSTThe pound is also strengthening this morning,up half a cent at $1.2825 against the US dollar.
Reuters’ Jamie McGeever has spotted signs that investors are more confident about UK assets.
Investors more sanguine on Brexit than at any point since Sept when May first adopted hard Brexit stance. Investors now buying GBP and gilts pic.twitter.com/kKQ3ipubIS 9.05am BSTMarine Le Pen’s best hope of victory would come in a sprint-off against former prime minister Francois Fillon, argues Antonio Barroso of Teneo Intelligence.
Barroso believes that many centrist and left-leaning voters might find this choice underwhelming, and not participate in such a moment round scenario.
The worst-case scenario in terms of a potential Le Pen victory is a runoff between Fillon and the leader of the National Front. This is particularly the case considering the former PM’s recent “rightist turn” after he suggested he would include members of an ultra-catholic organization in his administration.
Combined with his frequent attacks on the judiciary,this will only make it more difficult for Fillon to credibly moderate his positions in between rounds. The risk is that middle-left voters determine to stay at domestic on 7 May, allowing Le Pen to be elected by voter neglect rather than by voter endorsement. 8.54am BSTThis chart confirms that traders have been anxious about the French elections, or the prospect of a eurosceptic winner:As Sunday's 1st round of French election nears,one degree of euro volatility is well on track for its biggest weekly jump on record pic.twitter.com/As4mdjhyEZ 8.47am BSTTactical voting will probaly keep Marine Le Pen out of the Élysée Palace, argues Kit Nicholl, and country risk analyst at IHS Global Insight:
In a scenario where Le Pen is pitted against Fillon,or more likely, Macron, and voters from the moderate left and right are likely to unite in a so-called “Republican front”,voting tactically to keep the FN out of power.
A Le Pen victory is therefore unlikely but still remains possible, particularly as abstention rates will also play a tall role. 8.37am BSTThe euro has hit its highest level since the end of March this morning.
The single currency gained 0.3% against the US dollar to $1.074, or after a new opinion poll suggested centrist candidate Emmanuel Macron will win the French election.
Il ya de nouveau UNE VRAI DYNAMIQUE MACRON "BERCY" Sondage HARRIS AUJOURD'HUI comme BVA hier et assurément ODOXA demain Mais IFOP a du MAL⬇️ pic.twitter.com/7HwMo3XuqW#FRANCE'S MACRON TO BEAT LE PEN IN 2ND-ROUND 66% VS 34%: HARRIS - BBG 8.20am BSTGood morning,and welcome to our rolling coverage of the world economy, the financial markets, and the eurozone and business.
Political issues continue to occupy the market’s attention today. Volatility in the euro has peaked at its highest since before the June referendum as markets weigh the prospects of either Marine Le Pen or Jean-Luc Melenchon – or both - making the moment round. The killer scenario for the euro would be whether both candidates make the May 7th runoff as it would raise the very real opportunity of France exiting the euro.
Current polling gives the nod to Macron and Le Pen,with Macron eventually winning. But with four candidates polling around 20% there is every reason for caution. We’re looking at contingency plans in the event of a Le Pen-Melenchon runoff as this would spark a tall selloff in the euro and French government bonds, as well as bank stocks.
Ah yes, or that 'softer' Brexit... pic.twitter.com/Rw7YDe5nKOGood morning. Asia stocks strengthening on short covering into French election this weekend. Strong Japan trade data props up stock markets. pic.twitter.com/2ADGZyzBq0Continue reading...
Source: theguardian.com