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Markets cheer French election

Global share futures markets are surging and the Euro jumped at this morning’s opening as traders take the first opportunity to position after the French election result. While the increased popularity of the centrist candidate is not a strong market driver, a collective sense of relief that the global economy is over another hurdle should see a risk on rally in Asia Pacific trading today.

Both defeated French presidential candidates have thrown their weight behind the independent Macron. Consensus is that this is sufficient to sideline his far right opponent Le Pen, wiping out the prospect of a Frexit and the disintegration of the EU. In response gold is under selling pressure and oil and copper are receiving support. These are heralds of a focus on growth exposed assets, and regional exchanges should see support despite negative leads from the close on Saturday morning.

In further signs of market enthusiasm EUR/USD and US SP500 futures are up more than 1% this morning. The clearer and better than expected French election result may have institutional investors scrambling ahead of US national account and housing data and Japanese inflation numbers this week. Australian investors will likely focus on Q1 CPI data due to its influence on RBA decision making.

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