Volatility on the menu of election-focused week in Europe [Video]
|The first round of the French legislative election went totally according to the plan for Marine Le Pen’s Nationally Rally which secured one vote over three and became the first far-right party to top the legislative elections in France. The New Popular Front – the alliance of left and greens - won 28% of the votes and Emmanuel Macron’s party posted a miserable 20%. The second round is due next weekend.
The kneejerk reaction was a jump in the euro and European equities in the early week trading on hope that Nationally Rally will struggle to get a parliamentary majority, but risks prevail.
Across the Channel, the week starts with increased election vibes as well, because Brits will be headed to their own general election this Thursday with little suspense on the horizon. A Labour win is seen as a net positive for financial markets and sterling.
In the US, last week’s data was supportive of the Federal Reserve (Fed) doves, but the narrow rally in US markets worry more than elections, for now.
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