SYDNEY — Risk assets are rallying in early Asian trade after the French presidential vote set the stage for a final run-off between centrist Emmanuel Macron and far-right National Front candidate Marine Le Pen.
The euro surged against other major currencies on the result, which avoids the prospect of a final run-off between two anti-EU candidates. Macron is pro-Europe and on current polling would be expected to defeat Le Pen in the final vote on May 7.
Gold fell and global stock futures rallied as markets opened in Asia.
With 80% of the vote counted, Macron was on track to take 23.4% of the vote with Le Pen on 22.6%. Francois Fillon of the centre right was on 19.9% and far left candidate Jean-Luc Melenchon was on 18.9%.
Shane Oliver, chief economist and chief investment officer at Australian investment firm AMP Capital, said in a note: “This result is positive for investment markets, with the Euro up around 1.5% from Friday’s close, as in recent weeks there was a fear that Melenchon would make the run off against Le Pen as both advocate policies that would threaten the Euro (albeit Melenchon a bit less so) and would be negative for the French economy (increasing state participation in the economy, deficit spending, more regulation, etc).
“With all the talk about a populist/nationalist surge across Europe supposedly on the back of the Eurozone public debt and migration crises and the Brexit and Trump wins and Thursday’s latest terrorist attack in France, the surprise for many may have been that Le Pen did not do better. In fact poll support for her looks to have peaked at the tail end of the Eurozone crisis in 2013 when it got as high as 35%.”
Here’s a quick look through some of the major market moves, with charts, via investing.com.
US stock futures surged. S&P500 futures were up more than 1%
The euro exploded against the Yen, gaining around 2.5% in early trade
Gold tumbled more than 1% to trade around $US1,269
European stock futures also rallied, most spectacularly the German DAX, which gained almost 2% before pulling back
Bond yields also spiked. Here’s a big move in the Australian 10-year government bond to 2.63%
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