Global markets were oddly calm on Friday, the last day of trading before the first round of France's closely fought presidential election, with European stocks posting modest declines ahead of Sunday's main event, Asian shares rising, and set for first weekly gain in the past month, while U.S. futures were unchanged. French bond yields hit three-months low even as the euro has seen some recent weakness.
Thomson Reuters(Reuters) - Investors who worry that the French election could see the far-right Marine Le Pen reach the second round are bracing for another risk - that the far-leftJean-Luc Melenchon could make it too, perhaps even against her.
Ahead of the first round of the French elections on Sunday, Deutsche Bank's equity strategist Sebastian Raedler again reminds his bank's clients and the seemingly unperturbed markets, that despite the tightening of the poll numbers among the four front-runners, European equities show little sign of pricing in a meaningful political risk premium. In fact, as he notes below, European equities appear to not have priced in even a modest political risk discount.
NEW YORK: The dollar fell broadly on Friday as a slide in oil prices ahead of weekend talks among producers in Doha and a soft US consumer sentiment report capped risk appetite and spurred investors to buy safe-haven currencies such as the yen. The dollar index, tracking the greenback's value against six currencies, posted losses after two straight days of gains. The US currency's fall versus the yen was the largest daily loss in more than a week. "There's probably some anxiety about the Doha talks," said Shaun Osborne, chief currency strategist at Scotiabank in Toronto.
NEW YORK: The yen struggled across the board on Friday after posting gains this week, weighed by warnings overnight by the Japanese finance minister of possible intervention to weaken the currency. Gains in global stock markets and oil prices also bolstered the market's appetite for risk, diminishing the appeal of the safe-haven yen. The yen had surged as much as 2 per cent against the dollar on Thursday.
LONDON: The yen surged to a two-week high against the dollar on Wednesday after the head of the Bank of Japan said the currency was unlikely to fall further because it was already "very weak", prompting investors to trim huge bets against it. As oil prices jumped on a report that US oil production was levelling off after years of sharp increases, commodity currencies such as the Canadian and Australian dollars soared by over 1 percent against their US counterpart.
The Socialists were routed in the second round of French elections this weekend. The centre-right UMP party led by Nicholas Sarkozy was the clear winner but Marone Le Pen's National Front had it best performance ever at the local level although it did not win any départements.The Financial Times reports Nicolas Sarkozy the winner as French local polls deal blow to Socialists.
Latest polls show French President Sarkozy is losing ground to right-wing anti-euro candidate Marine Le Pen in the first round of the France presidential election. Via Google translate, please consider Le Pen and Bayrou Back