Sudden euro risk as French election convulsed

The USD firmed last night:

Commodity currencies were weak:

Gold too:

Brent was flogged:

Base metals rebounded a bit:

Big miners mostly didn’t:

EM stocks were hit:

High yield was OK:

US bonds were flat:

So were European spreads:

And stocks faded:

It’s bizarrely calm given what is suddenly at stake, via the FT:

French business leaders are breaking their silence ahead of Sunday’s presidential election to urge the country not to vote for extremism, after a campaign marked by strong support for far-left and far-right candidates.

The warnings about far-left leader Jean-Luc Mélenchon and far-right leader Marine Le Pen show the level of alarm in business circles at the poll ratings of both. It is in sharp contrast to the situation a few weeks ago, when corporate leaders were largely refusing to speak out about the election and were quietly confident that a pro-business candidate would win.

In an article in French daily Le Monde this week, more than 200 business leaders have urged voters not to support extreme candidates, who they accused of “selling illusions, false promises and impossible gifts”. Separately, Pierre Gattaz, the president of Medef, the employers’ federation, said voting for either Mr Mélenchon or Ms Le Pen would “put our companies at great risk, from the small to the large”.

France’s latest polls show an increasingly tight election race in which Mr Mélenchon and Ms Le Pen have similar support to the two mainstream pro-business candidates, the conservative François Fillon and the centrist Emmanuel Macron. This has increased concerns that Mr Mélenchon and Ms Le Pen could top the polls on Sunday and create a second-round run-off on May 7 between two candidates hostile to free trade and the EU.

The problem is both candidates are anti-euro. On the Left, communist candidate, Melanchon, has come out of nowhere to be in the running against centrist Macron. On the Right, Le Pen still leads Fillon.

And the undecided vote is still very high:

Late swings traditionally favour incumbents but not in recent populist elelctions. Polling still favours a Le Pen-Macron second round runoff which the latter would win easily, but the margins of error for a first round knock-out by two victorious anti-euro candidates are now eerily familiar versus Brexit and Trump.

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