Most of the results are in, and while it remains close, Macron will likely be the winner of the first French presidential round and is set to face Marine Le Pen in the runoff.
What does that mean for various asset markets and the bigger macro picture? Here are two forecasts, just released from Goldman and Citi.
First, Goldman Sachs:
Ahead of Sunday's first round of the French election, we have previously provided several perspectives on the political and economic outcomes, including a permutation matrix of all six possible outcomes in terms of "high" vs "low market risk" (from BofA), why the market may be too complacent about a Le Pen - Melenchon result (candidate approval variance is within the polling error), and that European stocks have completely failed to price in any adverse outcome (as DB observed yesterday).
European stocks rose amid earnings beats, offsetting weakness in the energy sector and easing investor concerns ahead of the weekend’s French election. Asian shares and U.S. futures also rise. The dollar weakens against the euro and most crosses, while crude oil rebounds following renewed OPEC chatter of a production cut, this time with Saudi Arabia seemingly onboard.
Yesterday, we presented a Deutsche Bank research report which tried to evaluate whether, despite polls suggesting otherwise, a Le Pen-Melenchon first round victory was possible in the French election this coming Sunday. In a surprising break from the conventional wisdom, this is what DB concluded:
According to a report by Korea JoongAng Daily, China appears to be preparing measures in case North Korea tests a nuclear device or performs another provocation, including possibly suspending oil to the regime, and adds that relations between Beijing and Pyongyang appear frostier than ever before.