After initial kneejerks higher in the euro and equity futures, it appears Macron's victory is now a "sell the news" event as EURUSD has dropped 60 pips from post-election highs...
S&P Futures are fading...
And gold has bounced back to Friday's highs...
Authored by Kevin Muir via The Macro Tourist blog,
Remember how a couple of weeks ago investors were scrambling to buy Euro currency protection in front of the French election? Today, worries concerning tomorrow's second round between Le Pen and Macron are extinct (even with today's leaks). Macron’s win has pretty well been priced in.
Mark Cudmore, prolific Bloomberg markets commentator and former FX trader, asks a question that may validate all the work the ECB has put together in its "whatever it takes" effort of the past five years: is it time to stop worrying about the euro falling apart. For what it's worth, we believe the answer is a resounding no, for all the reasons anothr Bloomberg analyst, Richard Breslow, explained yesterday.
From Marc Cudmore's daily Macro View
A Macron Victory Should Seal Euro Narrative Shift: Macro View
With Euro strength dominating FX markets, the Dollar Index has tumbled below 99.00 to the lowest level since Nov 11th.
For the first time since Oct 4th, the dollar index is trading below its 200-day moving-average...
The most volatile pair is EURJPY as risk-on drives drag fx carry higher...
As results begin to trickle in (with pollsters showing Macron leading and official French Interior Ministry showing a Le Pen lead), betting odds ( according to Betfair) are now giving Macron comfortably over 80% chance of becoming France’s next President.
As the evening has gone on and the picture becomes clearer, his odds continue to increase. The market is clearly expecting a ‘Front Republicain’ to form, as it did in 2002, to rally behind Emmanuel Macron and to deny Marine Le Pen.