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Market Concerns Eased After Macron’s First Round Victory

The first-round voting of the French presidential election was revealed on Sunday night April 23. The two top candidates: independent centrist Macron and the far-right wing Le Pen, won 23.7% and 21.7% of votes respectively. Fillion and the far-left wing Jean-Luc Mélenchon both got around 19% of votes. The result was in line with expectations, black swans didn’t appear.

The terror attack that occurred on April 20 in Paris was likely to give Le Pen one last push just a few days ahead of the election. However, the votes Le Pen got were even lower than the recent polls of 23%, indicating the probability of her presidency is lower than expectations.

As Macron got the first place in the first-round of voting, surpassing Le Pen with 2% of votes, market concerns over the EU’s collapse after Le Pen’s presidency has been eased to an extent.

The consensus was that Macron and the Le Pen would likely get into the second round with Macron likely winning the final vote. The outcome is in line with the first half of the consensus. Markets are now focused on the second-round of voting with the first-round outcome lifting market confidence and expectations on Macron’s victory in the second-round on May 7.

The voting ratio was around 80%, higher than the forecast of 70%, indicating French civilians’ high concerns on the futures of France and the EU.

The outcome of the first-round voting pushed the EUR up and weighed on safe havens after the release of the outcome. EUR/USD soared more than 180 points, hitting the highest level of 1.0918 since November 11, 2016. Spot gold plunged from 1284.17 to a 2-week low of 1265.38. EUR/JPY hit a 1-month high of 120.72. USD/JPY hit a 2-week high of 110.53.

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