Mid-session Europe: Equities make hay after Macron win
An anti-Le-Pen coalition looks certain to cement Macron's coronation, with the pro-European centrist expected to poll around 60% of the vote. The Cac40 was up 5% on the open, and the spillover effect through European indices and equities was palpable, with the banking sector scoring particularly highly. Societe Generale led the way with a 9.2% jump.
- UK Prime Minister May to speak (1330 GMT)
- US Fed’s Kashkari (FOMC Voter) to speak (1530)
The outcome of the first round of France's presidential election was positive for the euro as the market gapped higher at the open, with EURUSD reaching five-month highs at 1.0933, even though the results, as noted by many observers, were in line with expectations. EURUSD was last trading at 1.0860, close to the key 200-day SMA at 1.0840. The market will be looking to see if the current surge can see some follow-through above 1.0900 or we see the gap close otherwise ahead of the European Central Bank meeting on Thursday. EURJPY's move overnight was very impressive as the pair surged above 120.80, and it was last traded at 119.55 going into mid-session in Europe. Polls for the upcoming second round of the French election indicate Macron winning by 64% to Le Pen’s 36%.
The rally in French banks put the Cac40 up by 4.51%, on track for its highest close in nine years. Gains for German bank stocks helped put the Dax30 (+3%) on course for a record closing high. The broader Stoxx Europe 600 rose nearly 2% intraday.
Among the biggest winners, Société Générale surged 9.2% and BNP Paribas gained 8.5%. Credit Agricole jumped almost 10% this morning. In Italy, shares of UniCredit SpA popped higher by 10.8%, Germany’s Deutsche Bank climbed 7% and Spain’s Banco Santander SA tacked on 4.6%.
The Conservative Party confirmed plans for a cap on UK energy prices. Centrica lost 4% on the news.
With the risk-on sentiment, gold dropped as stock markets rallied. Randgold Resources lost 4%.