France outperforms after weekend election

European stocks are slipping again at the start of what is likely to be another very lively week in financial markets.

That has very much become the norm this year for obvious reasons but this week has an interesting mix of central bank decisions, the start of earnings season and major data releases which will keep us all on our toes. And then of course there’s China, where restrictions are causing concern, property firms are back in the spotlight and policymakers could unleash some support after bold promises a few weeks ago.

Considering what’s to come, it’s no surprise that it’s actually been a relatively timid start to the week. Compared to what we’ve become accustomed to, of course. Interestingly, the CAC is the only major index in the green after the weekend’s first-round election, which saw Emmanuel Macron and Marine Le Pen progress to the second round in a couple of weeks.

The run-off between the two candidates is looking to be far closer than five years ago when Macron scooped two-thirds of the vote. While there is still plenty that could not bring themselves to vote for Le Pen as we saw in 2017, her softened image appears to have swayed others and while pols still favour Macron, some fall within the margin of error that makes Le Pen a realistic victor this time around.

While that would no doubt be bad news for Europe, it seems markets aren’t particularly concerned if today’s trading is anything to go by. Some have chosen to compare a Le Pen victory to Brexit and Trump, two events that were deemed to be a negative for stock markets before the vote but did not turn out to be so over time. Perhaps lessons have been learned.

Further pain ahead for bitcoin?

Bitcoin is getting hit hard again on Monday, losing more than 4% and coming close to USD 40,000 where it could see some support. A break of this level could be a psychological blow. From a technical perspective, it would also mean a break of the 50 fib level – 2022 lows to highs – which could also be a negative signal. It will be interesting to see if these levels attract dip buyers as the breakout two weeks ago looked to be a very bullish move. But it’s all been downhill since then.

For a look at all of today’s economic events, check out our economic calendar:

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam