For once, the polls got it right and the first round of the French elections produced a run-off between Macron and Le Pen. Center-left candidate Macron is expected to win easily in the final round on May 7.
View previous commentaries.
China’s banking regulator warned of a crackdown on “irregularities” that implied a curb on leveraged trading. On the French election news, the Nikkei 225 rose +1.37% but the Shanghai Composite fell -1.37%.
The German April IFO business climate rose above expectations. With the relief from the French elections, European equites were sharply higher with the DAX up +3.37%. Yields on the 10-yr. Bund leapt higher to 0.336%.
There were no major economic reports scheduled today.
Even as yields on the 10 Year Note rose sharply to 2.273%, the US$ Index was falling to near 99. The weak US$ didn’t help gold, and the June contract fell -0.9% to $1,277.50. Concerns about OPEC’s commitment to production levels weighed on oil, with June crude down -0.8% at $49.23.
Equities began the day broadly higher. Once open, markets traded sideways in a relatively narrow range with no pullback and no spike higher. At the close, the market held its gains.