EU

Italy’s upcoming general election, slated to be held next weekend on March 4th, has garnered far less market attention than its French or German counterparts had last year, and perhaps for good reason.

The widely-expected outcome of the French presidential election came to be on Sunday evening, as pro-euro centrist Emmanuel Macron was projected to become the new President-elect of France. Macron easily defeated his rival, anti-euro candidate Marine Le Pen, by a substantial margin, prompting some to declare that the election outcome was a clear vote of confidence for European unity.

The time has come once again for markets to speculate on who will ultimately become the next president of France, as the second round of the French presidential election is set for this Sunday. But this time, unlike the first round of the election two weeks ago, the deep market concerns that anti-euro candidate Marine Le Pen might have a good chance to win have turned into a distinct expression of relief that pro-euro Emmanuel Macron is increasingly likely to pull out a potential landslide victory.

GBP/JPY continued to surge on Thursday to hit its highest level since early-February, extending the sharp breakout move that has been in place for more than a week. This breakout was initiated last week on April 18th, after UK Prime Minister Theresa May called for a snap election to be held in June.

With most of the votes for the first round of the French presidential election reported late on Sunday, the outcome has emerged very much as pre-vote polling had suggested. Centrist Emmanuel Macron and far-right candidate Marine Le Pen have been voted through to advance to the second and final round of voting, set for May 7th. Though it was a close race to the very end, first round votes eliminated both the conservative candidate Francois Fillon and far-left, anti-EU candidate Jean-Luc Melenchon. Macron emerged with around 24% of the votes, with Le Pen trailing at around 22%. Fillon and Melenchon each received around 20% of the votes.

The long-awaited French presidential election kicks off on Sunday, pitting four main adversaries against each other in a heated first-round battle. The four primary candidates span the political spectrum, but the market impacts of their successes or failures on Sunday will be tied indelibly to their policy stances on French participation in the European Union and euro currency.

With just three days before the potentially pivotal first round of the heated French presidential election on Sunday, April 23rd, a resilient euro appears rather oblivious to the risks imposed by the two fiercely anti-EU candidates – Marine Le Pen and Jean-Luc Melenchon. This may be partly due to the narrowly higher poll-standings of centrist candidate Emmanuel Macron, who has portrayed himself as a strong supporter of French participation in the European Union and euro currency.

The heated battle for the French presidency has quickly transformed from a tight race among three primary candidates – the centrist Emmanuel Macron, far-right Marine Le Pen, and conservative Francois Fillon – to a four-way contest that adds far-left candidate Jean-Luc Melanchon.

For several months now, financial markets have harbored increasing concerns over the future political direction of the European Union’s member-nations. Chief among these concerns has been the rise of intense nationalist sentiment led by often-charismatic leaders with distinctly anti-globalist views. Perhaps nowhere have these worries been more keenly felt recently than in France, where the upcoming election will present a pivotal test of European unity.

The EUR/GBP managed to bounce back relatively sharply just before the end of last month after receding Brexit fears had exerted strong downward pressure on the cross throughout the month of April. The recovery may have been driven by lingering ‘Brexit’ concerns and recent weakness in UK data, including last week’s Purchasing Managers’ Indices (PMI) which fell across all the three major sectors of the UK economy as caution prevailed ahead of the UK-EU referendum on June 23.

Mark you calendars for June 23^rd! Beyond representing one of the first days of Summer in the Northern hemisphere, that’s the date scheduled for the long-awaited “Brexit” vote on whether the UK will remain part of the European Union.