Report
EUR 23.18
For Business Accounts Only
http://track.com/articles/the-weekly-track-vive-la-france/
The French election is the event for the week ahead. The analysis of the first round voting will be quick and then slow as the myriad of risks into May 7 remain complicated. There is a relief rally underway given that the Macron vote was sufficient to get to the second round and puts him as the likely winner but there are nagging doubts given the rise of Le Pen share – 3 exit polls put Macron at 23.7% and Le Pen at 22%. The polls were close enough in this first round so most will assume they are accurate to the 2nd round. The 1.09 level and 1.0950 levels in EUR seem likely to hold accordingly but 1.0830 maybe the first destination for trading. If the risk-aversion seen in the last 2 weeks was because of France, then many will reverse this fear. This puts the market back to other big events to watch in the week ahead with ECB, BOJ and Riksbank all important post the IMF victory lap over deflation this weekend. Whether this all proves out remains critical to trading. U
S policy and the role of global trade in the mix continues to gnaw away at confidence as well. Notable that the IMF removed its pledge to resist protectionism – much like its previous drop to fight capital controls 2 years ago. The world is growing, central bankers are still easy and money has to go somewhere – so they remain the biggest force in the markets as their policy trumps all doubts still even those from voters.
One has to wonder if the present politics will sustain this bought confidence and whether the markets are ignoring larger signs of trouble ahead. The focus beyond the French vote today will be on the US policy shifts ahead starting with tax reform Wednesday and colliding with the reality of the US deficit and government shutdown risks Friday. The partisan divide in the US is replicated in France and elsewhere and isn’t in a vacuum but likely a consequence of the intentional asset price inflation of the central bankers at the expense of the working class. Globalization will remain the central debate in the weeks and months ahead regardless of today’s results.
The Weekly Track vive-la-france
- The Weekly Track – Vive la France by Bob Savagehttp://track.com/articles/the-weekly-track-vive-la-france/
The French election is the event for the week ahead. The analysis of the first round voting will be quick and then slow as the myriad of risks into May 7 remain complicated. There is a relief rally underway given that the Macron vote was sufficient to get to the second round and puts him as the likely winner but there are nagging doubts given the rise of Le Pen share – 3 exit polls put Macron at 23.7% and Le Pen at 22%. The polls were close enough in this first round so most will assume they are accurate to the 2nd round. The 1.09 level and 1.0950 levels in EUR seem likely to hold accordingly but 1.0830 maybe the first destination for trading. If the risk-aversion seen in the last 2 weeks was because of France, then many will reverse this fear. This puts the market back to other big events to watch in the week ahead with ECB, BOJ and Riksbank all important post the IMF victory lap over deflation this weekend. Whether this all proves out remains critical to trading. U
S policy and the role of global trade in the mix continues to gnaw away at confidence as well. Notable that the IMF removed its pledge to resist protectionism – much like its previous drop to fight capital controls 2 years ago. The world is growing, central bankers are still easy and money has to go somewhere – so they remain the biggest force in the markets as their policy trumps all doubts still even those from voters.
One has to wonder if the present politics will sustain this bought confidence and whether the markets are ignoring larger signs of trouble ahead. The focus beyond the French vote today will be on the US policy shifts ahead starting with tax reform Wednesday and colliding with the reality of the US deficit and government shutdown risks Friday. The partisan divide in the US is replicated in France and elsewhere and isn’t in a vacuum but likely a consequence of the intentional asset price inflation of the central bankers at the expense of the working class. Globalization will remain the central debate in the weeks and months ahead regardless of today’s results.
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Robert Savage
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