There were fireworks galore in the financial markets on Monday. The U.S. dollar and the Japanese yen were big losers and the Euro FX was a big winner. Stock markets in the U.S. and Europe had big rallies also. Gold was heavily lower.
The main driver of the big changes in values was the first round of voting in France. The two candidates who will move on to round two on May 7 are Macron (centrist) and LePen (right wing). Macron led LePen by two percentage points at the close of voting. The big rally in stocks and Euro FX were caused by the view of investors that the other political parties in France will now throw their support behind Macron to deny LePen the leadership of France.
Macron supports France remaining in the EU while LePen favors France leaving the EU. Traders were wary of a replay of the Brexit vote in England and the victory of Trump in the U.S. presidential race. Time will tell who is correct.