Concerns of a Frenchxit diminished a bit following the first round of elections in France. The results have given the markets a hint that France will have a centrist President, who will look to remain in the European Union.
Emmanuel Macron is coming in as a favorite over nationalist Marine Le Pen in the second round of elections on May 7th. This feeling had the Euro rallying against the US Dollar, and also had gold and Treasuries getting knocked down as the markets switched back to a risk on mode.
Equity markets in Europe and the U.S. surged on the election news as well. Both the Dow and S&P futures sustained their overnight rallies, closing up over 1% on the day. This optimism could continue through out the week, with many big names (Alphabet, Amazon, Microsoft) report earnings. President Trump also plans to announce a tax reform plan on Wednesday, which has the potential to be market friendly.
As we know from recent elections, the prediction is not always the same as the outcome, so the picture could change quickly.
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