Authored by Mike Shedlock via MishTalk.com,
The markets appear giddy over the election prospects of Emanuel Macron in France.
Equities are up along with bond yields. Gold is down.
Macron won round one of the French election Sunday and will square off against Marine Le Pen in round two on May 7. He is widely expected to win round two, becoming the next president of France.
Policy Advancement
Can Macron Save the World? Save France?
Despite coming second in the results, trailing Macron by just over 2% in the final vote, there were several places in France where Marine Le Pen didn't manage to get a single vote: 56 places in fact.
Risk is definitely on this morning as European shares soar, led by French stocks and a new record high in Germany's Dax, after a "French relief rally" in which the first round of the country’s presidential elections prompted investors to bet that establishment candidate Emmanuel Macron will win a runoff vote next month, and who is seen as a 61% to 39% favorite to defeat Le Pen according to the latest just released Opinionway poll.
For those who may have missed yesterday's events, here is a quick recap from DB:
This was also a holiday-shorted week.
As we write this, the big news comes from the election in France. The leading candidate is a banker named Emmanuel Macron, with about 24% of the vote in a 4-candidate race. The anti-euro Marine Le Pen came in second with just over 21%. From the sharp rally in the euro, which was up about 2% at one point, we assume that observers believe the odds of France leaving the euro have just gone down.
With events in France developing fast and furious, and with Le Pen either leading (for now) according to official French ministry data, or in second place according to exit polls, Citi's Fraser King asks: "Is this the end of the two-party system in France."
More from Citi:
If results stay as polls suggest, with Le Pen and Macron in the second round, it will be the first time in the history of the ‘fifth’ Republique, that one of France’s two major parties will not be present, marking a monumental change in the French political landscape.