Headlines:
- Upsets still do happen in politics
- Weekly update on interest rates expectations
- ECB's Knot: There is no reason to cut rates in July
- BOE's Haskel says would rather hold rates until there is more certainty on inflation
- BOJ maintains economic assessment for 5 of Japan's 9 regions in latest 'Sakura Report'
- Eurozone July Sentix investor confidence -7.3 vs 0.0 expected
- Germany May trade balance €24.9 billion vs €21.1 billion expected
- SNB total sight deposits w.e. 5 July CHF 453.4 bn vs CHF 452.0 bn prior
Markets:
- GBP leads, NZD lags on the day
- European equities higher; S&P 500 futures flat
- US 10-year yields up 3.9 bps to 4.311%
- Gold down 0.7% to $2,375.01
- WTI crude down 0.8% to $82.52
- Bitcoin up 1.5% to $57,211
The main news over the weekend in Europe was the upset in the French elections. What was supposed to be a red carpet laid out for Le Pen's far-right to sweep into power turned out to be quite different.
Instead, the French people voted against a far-right government and that saw leftist coalition, the New Popular Front (NFP), come out on top. It resulted in a hung parliament, which is likely to lead to a political gridlock until the mess is sorted out.
The euro opened with a gap lower and so did French stocks to start the day. But that all turned around as traders fade some of the fear of a political impasse in Europe's second largest economy.
EUR/USD already erased most of its losses in Asia, climbing from 1.0800 to 1.0830 levels and stuck there in European trading. As for the CAC 40 index, it opened 0.5% lower but now trading up 0.2% on the day as equities bounce back.
Besides that, there wasn't much else happening with the dollar largely steadier following its drop from Friday. USD/JPY was down as much as 160.26 in Asia but recovered well ahead of European trading and is holding just under 161.00 on the day.
Other dollar pairs did not really do much with traders already having priced in two rate cuts by year-end, not really having much else to shift that goalpost after the NFP last week.
