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EUR/USD: Trading slightly lower (-0.01%) at 1.0835 – Deutsche Bank

The second round of the French election, where an electoral shock with the far-left New Popular Front ensuring the surprise result of being the largest group, analysts say Deutsche Bank.

Markets brace for political situation in France

“The main story this morning is obviously the second round of the French election, where another electoral shock has taken place in 2024 with the far-left New Popular Front securing the surprise result of being the largest group. They are in line to win 182 seats. The far-right party RN and its allies have claimed 143 seats. Macron’s ENS movement looks set for 163 seats.”

“The NPF has the most fiscally aggressive programme in terms of spending and taxes and the market will suspect that the prospect of them being in government now or later will bring higher deficits with associated concerns about debt sustainability and strained relations with Europe. They were talking about wealth taxes and corporate tax increases, which will not be market friendly.”

“So far this morning, the Euro (-0.01%) is trading only marginally lower at 1.0835 against the US Dollar, while European equity futures linked to the STOXX 50 (+0.32%) are rising as I write. OAT futures are lower but well within Friday’s trading range.”

Source: Fx Street

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