French Stocks Edge Lower Following Paris Shootings

French stocks are lower following terror linked shooting. The CAC 40, which already seemed to celebrate Macron’s lead in the Presidential race, is correcting after the terror related shooting in Paris Thursday, which is feared to boost Le Pen’s chances in what already looked like a very tight four way race. The CAC 40 is down in early trade, while FTSE 100 and DAX are managing slight gains, following on from improved markets in Asia and the U.S.. French 10-year yields are still coming down and the spread over the German benchmark narrowed slightly in early trade, but the events will be a reminder that the election on Sunday remains wide open.

Paris shooting opened the French election race. Isis has claimed responsibility for the shooting in Paris Thursday evening that saw a terror suspect killing one policeman and seriously wounding two others, before being shot by police himself. The attacker had just been released from prison after being convicted of three attempted murders back in 2001, but he was reportedly not on the list of people being seen as a threat to national security. Police are said to be on the hunt for a second suspect, however, after a tip off from Belgian security officials. Outgoing President Hollande said he was convinced the shooting was a “terrorist act” and the incident could open up the already right election on Sunday, which ahead of the shooting looked like a four-way race, with Macron in the lead.

French PMI’s Were Stronger than Expected

French PMIs were higher than expected, with the manufacturing reading rising to 55.1 from 53.3 and the services reading nudging higher to 57.7 from 57.5. The Easter effect may have distorted the picture somewhat, but the overall improvement in the composite reading to 57.4 from 56.8 confirms that the French economic performance is finally catching up.

German PMIs were mixed, with the manufacturing reading coming in a tad higher than expected, but still falling back to 58.2 from 58.3. The real disappointment though was the services number, which fell back to 54.7 from 55.6 in the previous month. The Easter effect and the spell of cold weather this month may have impacted numbers somewhat and composite reading of 56.3 still points to ongoing robust expansion, but is not just below the March reading.

UK March retail sales fell more than expected, by 1.8% month over month, reversing the 1.7% month over month growth seen in February. The median expectation had been for a more modest 0.3% month over month contraction. The year over year figure rose 1.7%, slightly up on the 1.6% year over year in the month prior. In the three months to March, sales fell 1.4% quarter over quarter, which is the first quarterly decline since 2013. The ONS stats office pointed to higher prices as being the main culprit.