Article / 21 April 2017 at 7:00 GMT

Morning Markets: Will Paris shooting hurt Macron, risk sentiment?

Head of Editorial Content / Saxo Bank

Morning Markets


  • France: Flash April Purchasing Managers' Index (0700 GMT)
  • Germany Flash April PMI (0730 GMT)
  • Eurozone: Flash April PMI (0800 GMT)
  • UK: March Retail Sales (0830 GMT)
  • US: Flash April PMI (1345 GMT)

Last night's shooting on Paris' Avenue des Champs-Élysées has been claimed by the Islamic State in a development that may prove negative for centrist presidential candidate Emmanuel Macron, who is generally seen as less credible on terrorism and security than right-wing rivals François Fillon and Marine Le Pen.

Macron's strong polling into Sunday's vote has been one of several factors spurring risk appetite in Europe, so today's market action will likely provide some clues as to the market's weighting of the shooting's import. Before the event, Macron led in polls with 24% support versus Le Pen's 21.5%. 

Asian markets were up on the day with European bourses expected to follow their lead. In Tokyo, Fujifilm shares plunged by 4.1% after the company delayed the release of its fourth-quarter earnings after finding accounting irregularities at a subsidiary. 

Oil prices continue to recover from their midweek drop on high US gasoline inventories, while Bank of Japan governor Haruhiko Kuroda was out stating that BoJ easing isn't ending any time soon, with the JPY venturing lower as a result. 

In the US, Treasury Secretary Steven Mnuchin said sweeping tax reforms will be completed this year in a deal that will "pay for itself." President Trump will sign an executive order Friday directing Mnuchin to review tax regulations from 2016; according to his budget director, he plans to spend $200 billion on an infrastructure plan that will leverage private financing. 

Trump's long-awaited infrastructure and tax programmes were the twin expectations propping up the post-election "Trump trade".

Into the European open, a 28-year-old man has been arrested as a suspect in the attack on the Borussia Dortmund team bus on April 11. According to the Federal Prosecutor's office, the man had a "financial motive" as he had speculated on Dortmund's share value dropping after the bombing.

Market signals

Asian session

  • Asian markets opened higher after Wall St rallied on corporate tax cut hopes
  • US Treasury Secretary says the tax reform plans could be unveiled soon
  • Japan's Flash Manufacturing PMI rose to a two-month high of 52.8 (52.4 in March)
  • Japan's Nikkei 225 headed sharply higher, buoyed by Wall Street and the weaker yen
  • The Nikkei 225 was up by 1.02% to 18,620.75 at close
  • Hong Kong's Hang Seng was up  0.16% to 24.095,81 at close
  • The Federal Reserve fined Deutsche Bank $156.6 million for violating forex rules 
  • Trump's move to cut cheap steel imports will hurt BHP and Rio Tinto, Asian steel mills
  • A terrorist attack that led to the death of a policeman has shaken central Paris
  • The S&P/ASX200 regained ground lost this week; it was up 0.56% to 5.854,10

Forex ahead

  • USDJPY climbs to 109.30 area following BoJ comment
  • EURUSD spiking into European open, trades at 1.0722 as of 0750 GMT
  • USDTRY recovers to 3.64 following overnight slide
  • USDCAD loses 15 pips overnight on continued oil recovery

From the Floor

France votes.The main thing to watch is the French election this weekend,” says Horchani.

US rally.We had very strong sentiment yesterday in US equities, very broad-based,” says Garnry.

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

Traders either have to either ignore the French election or take a position today on it today, as the results cannot be traded when they are announced on Sunday evening, writes Juhani Huopainen.

Steel strength
Steel and iron ore futures pushed higher in China but the market remains cautious with data still showing strong growth in output, writes Saxo's Sydney trading team.

Crude tug of war

Oil prices are being pulled in two directions, with hopes of Opec achieving its cuts serving to support prices, and concerns about higher output elsewhere pulling them lower, says the Saxo APAC Sales Trading team.

EURUSD on a Macron win

Emmanuel Macron remains the favourite to win the French election, with a centrist victory likely to boost the euro, says Saxo head of FX strategy John J Hardy.


Thursday's apparent terror attack on Paris' Avenue des Champs-Élysées may have negative implications for centrist candidate Emmanuel Macron. Photo: Shutterstock

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