Félicitations à Macron

Monday, 8th May: The French Presidential Election was wrapped up on Sunday evening, with newcomer, and now the youngest elected president,  Emmanuel Macron fighting off Marine Le Pen to secure 66% of votes. Macron will replace the current President Francois Hollande, with the inauguration looking set to take place this week. French voters aren’t finished yet though; in mid June they will return to voting stations to elect France’s 577 members of parliament. Macron’s first test will then begin – he currently has no parliamentary seats, of which he needs to enact his reform proposals (although polls suggest he is on track to win 249 to 286 seats). Polls running in to the second round elections had suggested a Macron win, and subsequently, the impact on stocks and bonds in the region, and across Europe was subdued, suggesting investors had priced in the victory. Although it being a French National Holiday today, the CAC 40 was still open, trading negatively throughout the day, suggesting some profit taking from the result. It ultimately closed -0.91% while at the time of writing, the €/$ is -0.65% and €/£ is -0.25%.

Brent oil has had a choppy start to 2017, more recently falling back below $50/bbl for the first time since November. OPEC members, and other exporters including Russia, agreed to a production cut in the first half of 2017, in an attempt to drain large global stocks. They meet again on 25th May with many countries already talking of prolonging producer cuts past 2017. However, the efforts of these countries is being undermined by a surge in drilling by the US, who have added oil rigs for the 16th week in a row. Brent oil pared back further in afternoon trading and at the time of writing is lower by 1.24% at $48.62/bbl.

Disappointing data from China early this morning weighed on metal prices as China’s import growth slowed faster than expected, while export growth more than halved in April.  Imports rose 11.9% (March +20.3%), vs expectations of +18%, while exports grew 8%, down from +16.4% in March and below expectations of +10.4%. Copper imports fell 30% in April, the lowest import level in 6 months, as disruptions to ports in Australia earlier in the year have been partially blamed, although today’s sell off only adds to last week’s falls following weak Chinese manufacturing data. Miners Antofagasta and Anglo American rooted themselves to the bottom of the FTSE 100, closing -2.02% and -2.04% respectively.

Asian equities largely closed firmer overnight, with the exception of the Shanghai Comp in China. Overall, European markets seem to have been unmoved by Macron’s win in France, with the DAX in Germany and the FTSE closing flat. At the time of writing the Dow Jones and S&P 500 in the US are both trading slightly lower.