It looks like a Macron vs Le Pen run off in two weeks time, with Macron in front (not a final result, mere estimates only).
If the estimates are proved correct, and likely they are, then no Euro shock for Monday open. Probably no massive moves until the final round but Euro should hold, ‘steady as she goes’.
Update: - Macron still on track, for those outside of EU, he would be the youngest head of state since Napoleon, described as ‘centrist’, pro EU, former banker and FM.
Big change for La Belle France so far.
Le Grande Nation.
Grandeur de la France.
Summit of the 27 leaders in Brussels this Sat.
There’s been a hardening on the 27 side, not sure the reason(s) but either what is being said on the UK side not published or the calling of the snap election after the UK PM stating multiple times that this would not happen - maybe now a lack of trust.
Anyway, whatever the cause the lines have shifted.
Some details have been leaked, likely public after the summit.
I expect some GBP volatility on both Friday on the GDP release and on Monday on the divorce news.
I think it’s a good thing that he’s a young man. He’d bring a new, fresh perspective to France and to EU in general, hopefully for the better. If he wins, that is.
Summit of 27 to kick off today.
Short invitation letter emphasizes three starting points, or as Tusk says sorting the past before sorting the future.
The 3 aims contained within the third paragraph,i the last one is pertinent, there is a certain relief that at least one side is showing concern.
As mentioned earlier Eur/Gbp remains the vehicle for trading Brexit, I see the gap has now closed.
Well the reason for the sudden change in the 27 sentiment has just become clear.
Eur/Gbp came off the gap close, although markets thin.
The leak on last Wednesday’s meeting is gaining some traction both in UK and Europe.
Ireland is/was the UK’s closest ally within the 27, the calling of the election and it’s effect on the delicate NI talks likely have put that friendship under strain, hence the inclusion of NI in the three bullet points from the 27.
There is a sense of pessimism in what speed bump would call my ‘neck of the woods’.
And finally, the purpose of the meeting last Wed was to introduce Michel Barnier, the EU 27 appointed negotiator, to the main UK players including the PM.
Seems he was far from impressed. The use of slogans generally associated with elections is understandable, but usually not used behind closed doors and informal over dinner talks.
Not a great start, and def not ‘gossip’.
That was the end of last week, PA has remained significant, when looking at GBP this past week there has been a certain strength, perhaps a follow on from the election call, then buoyed on Tue by better than exp mfctr, Wed by better than exp construction and today on the services numbers.
Today alone should have been a big sell Eur/Gbp.
But since the gap close the opposite seems to apply.
Anyways, looking right the Euro is at a crossroads, next week has the potential to set the scene.
EURX making a triple top daily, helped by the mentioned gap, and of course an election.
Edit: never shy to give my opinion (or is it prediction :)) I think I would favour Eur, despite the numbers.
Interestingly (at least to me),
this chart https://invst.ly/3vvk6 shows you how every attempt by the Pound to trend since the
GFC (Great Financial Crisis) has failed, if you look at it from a multi-month sort of angle.
My biggest example that I always quote is the 2000+ pips rise and reverse over the sixteen months
from the summer of 2013, when former BoC governor Carney took the helm of the BoE and the
mad ‘rate hike’ frontrunning of the Pound by the usual suspects made the Pound run from about
1.50 to about 1.72 and then, when it all boiled down to a chimera, it all reversed like clockwork.
Since then, the Pound has meandered like a lost soul and the Brexit speculative fall has covered
the same distance: if I had to make a ‘prediction’ I would say that given that we are a year on
from the Brexit vote and a reversal has started to take shape, it is entirely possible that the
remaining six months may see a completion of this reversal to pre-Brexit-vote levels (around
1.40-1.45)… Whether one may want to call this ‘Pound strength’ or a ‘reversal of an uncalled-for panic selling’
is up to oneself, but how to trade it in these conditions is certainly a tough call in my modest
judgment.
Of course, as Peterma and I have shared on previous occasions, there is always this well-oiled
market motto (though best suited to stocks, one could muse):
so macron won.
what will the euro do in less than 3 hours from now on?
200 pips gap?
400?
5-600?
mind the gap
The importance for the 27 cannot be overestimated, Macron represents the new type of politician, straight and honest, not from the political elite.
I suspect that Pres Macron and Pres Trump will do business, many people regard them as opposites but they are not, disregard the media hype, these two guys will work together for the good of each their respective peoples.
Yeah, the gap thing, spoke about that over on gears.
Obviously it’s a Euro gap, Jack was mentioning Eur/Jpy - why this gap is such a big thing is the possibility of a double gap, so there are two gaps to aim for - not really a probability, je crois.
Bottom line is that the result remains Euro positive but do not chase 
Eur/Gbp to parity? i hope so for you…
Eur/Gbp around current levels is very acceptable, extremes to either side makes business that little more difficult.
It’s all about planning coupled with a heavy dose of luck, I figure a 10 to 15% difference will prevail for most of this year, then likely the negotiations will go sour which would be Stg negative.
The upcoming UK election result has bittersweet expectations, a landslide could well signal a more dovish UK approach, or it could be the opposite, very difficult to fathom the signals from a ‘bloody difficult woman’, or is that just being a male me?
