I said this week would be all about French politics and by God, the market hasn’t disappointed.
Here’s Wednesday’s Heisenberg challenge: spot the moment when centrist FranÃ§ois Bayrou said this:
I have two paths, to stand myself or to look for an unusual solution. I have decided to offer Emmanuel Macron an alliance. I have examined for several weeks all the elements allowing me to judge our country and I want to say at what point the seriousness of the situation has hit me. Never in the 50 years past has the democracy in France known such a situation.
Here was the immediate reaction across assets:
Shortly thereafter we got this:
FRANCE’S MACRON ACCEPTS BAYROU’S ALLIANCE OFFER: AFP
And more via Bloomberg:
- The euro reversed an early drop after centrist politician Francois Bayrou bowed out of the presidential race in France to support the campaign against the populist National Front.
- The common currency reversed losses against the dollar and the majority of its other G-10 peers as the Bloomberg euro index extended a rebound from a fresh low for the year and German bund yields bounced back from records
- Focus remains on French elections, with recent polls showing anti-euro candidate Marine Le Pen closing the gap with her rivals in the race toward the May 7 final round of elections, spurring anxieties among investors and currency managers
- Bayrou said he offered to team up with independent candidate Emmanuel Macron amid what he called “a risky situation”