Report
EUR 9.28
For Business Accounts Only
http://track.com/articles/the-morning-track-after-the-party/
Best to enjoy the party but know the type of hangover that could follow – that is the lesson for today as markets embrace the French 1st round vote and take some relief in the polls being on target driving up equity prices, down the USD, up bond yields, down gold and up oil prices– all making the unknown more palatable into May 7th. Macron leads Le Pen by 22% in the polls. Everyone expects the young Macron to win now and markets reflect that relief but there are some considerations in this elixir for the geopolitical weary investors. This is the first time since 1958, the start of the 5th French Republic, that neither the Socialists nor the Republicans pass the first round. Macron leads the polls for the second but his party – which is just 8 months old - is unlikely to get much support in the June 11th and June 18th legislative elections. France is going to elect either a far-right leader or a maverick that will have little ability to do the hard reforms needed in
labor, finance and business to drive growth and improve the lives of the electorate. The second lesson of the day is that the status quo for Europe isn’t going to hold and that maybe some reason to have doubts about the party. The hope for growth needs to translate into such without the support of the ECB – and that will be the next key focus for Europhiles with Draghi and his silver tongue Thursday. Until then the comparison of EU to US growth and politics will remain in play with the Trump promises of big tax reform plans Wednesday now a market event – with the 2-5-7 year debt auctions likely collateral damage as the Friday US deficit focus and debt-ceiling government shutdown risks remain. Congress in the US will need a win to counter the EUR rise and make the USD great again – but its unclear if that is what anyone wants or needs right now. The big resistance is 1.0990 and the 100-day m.a. for the EUR – that is the line to watch throughout the week with fail
ure to break out suggesting 1.0650 again and some filling in of the gap from 1.0725 to 1.0825.
The Morning Track after-the-party
- The Morning Track – After the Party? by Bob Savagehttp://track.com/articles/the-morning-track-after-the-party/
Best to enjoy the party but know the type of hangover that could follow – that is the lesson for today as markets embrace the French 1st round vote and take some relief in the polls being on target driving up equity prices, down the USD, up bond yields, down gold and up oil prices– all making the unknown more palatable into May 7th. Macron leads Le Pen by 22% in the polls. Everyone expects the young Macron to win now and markets reflect that relief but there are some considerations in this elixir for the geopolitical weary investors. This is the first time since 1958, the start of the 5th French Republic, that neither the Socialists nor the Republicans pass the first round. Macron leads the polls for the second but his party – which is just 8 months old - is unlikely to get much support in the June 11th and June 18th legislative elections. France is going to elect either a far-right leader or a maverick that will have little ability to do the hard reforms needed in
labor, finance and business to drive growth and improve the lives of the electorate. The second lesson of the day is that the status quo for Europe isn’t going to hold and that maybe some reason to have doubts about the party. The hope for growth needs to translate into such without the support of the ECB – and that will be the next key focus for Europhiles with Draghi and his silver tongue Thursday. Until then the comparison of EU to US growth and politics will remain in play with the Trump promises of big tax reform plans Wednesday now a market event – with the 2-5-7 year debt auctions likely collateral damage as the Friday US deficit focus and debt-ceiling government shutdown risks remain. Congress in the US will need a win to counter the EUR rise and make the USD great again – but its unclear if that is what anyone wants or needs right now. The big resistance is 1.0990 and the 100-day m.a. for the EUR – that is the line to watch throughout the week with fail
ure to break out suggesting 1.0650 again and some filling in of the gap from 1.0725 to 1.0825.
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Robert Savage
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