Morning Market Update – French Polls Cast a Positive Light

So Far

We start the week with the first round of French presidential elections. French election Round 1 update: Macron 23.87% versus Le Pen 21.43%. The presidential favorite Emmanuel Macron won the center ground in France on Sunday versus the right leader Marine Le Pen, ahead of elections on May 7.

The first round poll was welcomed by all the financial markets as Macron scored a huge win with around 24% of the vote versus Le Pen, the anti-European Union National Front chief, who scored 21%. A happy Macron said that “A page of France’s political history has been turned.” We hope these results would boost the world economy and put the political uncertainty of the US and Europe at bay.

Hungary’s central bank will meet on Tuesday and is expected to keep the monetary policy steady. We expect no major action from the bank till its June meeting due to its unconventional measures at its March meeting. The People’s Bank of China (PBOC) set the Yuan reference rate at 6.8673 versus Friday’s fix of 6.8823.

Coming Up

Moving on for the day, we have the Leading Economic Index from Japan which was seen at 104.4 during its last release. We expect to see some growth along with Japan’s Coincident Index which may provide some strength for the Yen. The German releases for the IFO – Business Climate is well under control and has been forecasted to be strong enough. We expect a continuous growth on the economic front.

The Wholesale Index released by the Statistics Canada was last seen with a huge growth rate and it should be interesting to see their outcome for the day.  Any decline below the 3.3% growth rate should cause worry for the Canadian dollar.

Later for the day, we have the Chicago Fed National Activity Index (CFNAI), released by the Federal Reserve Bank of Chicago. The Activity index seems to be doing well and this should boost the dollar further more for the day.  We also await the FOMC Member Kashkari’s speech regarding the direction of the greenback.  The US President Donald Trump said that he will be announcing the most awaited tax reforms this week, which would include substantial cuts for individuals and businesses. However, the tax reforms may not include every part that was discussed and is prone to have some changes.