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Why markets see Macron as next Obama or Trudeau

Monday, April 24, 2017 - 01:55

Euro zone money markets have priced in a higher chance of a rise in ECB interest rates after Emmanuel Macron won the first round of the French presidential election. But as Sonia Legg reports, investors are still bracing for the next round and what could follow even if the former banker and economy minister is elected in two weeks.

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They'd feared an earthquake but France emerged from the first round of voting in the presidential election relatively unscathed. Centrist candidate Emmanuel Macron is now - in theory - on course for a big win in two weeks' time. His far right opponent Marine Le Pen should be firmly trounced as the majority of the beaten parties put their weight behind Macron. (SOUNDBITE) (English) CITY INDEX, SENIOR MARKETS ANALYST, KATHLEEN BROOKS, SAYING: "He is essentially France's version of Obama. It's almost like Western politics as normal, the fact that he has got in. I think the expectation now is that he is just going to walk this election and the markets are really saluting it." Money markets even priced in a higher chance of an earlier that expected rise in ECB interest rates following the victory. They may have ideally favoured conservative Francois Fillon but Macron is an acceptable second best. (SOUNDBITE) (French) MARKET ANALYST AT MONTSEGUR FINANCE, FRANCOIS CHAULET, SAYING: "Emmanuel Macron projects a youthful, dynamic and positive image of France, he is someone who wants more from Europe. He wants to free up businesses and implement reforms to the pension structure, and to work and unemployment benefits. It's reassuring to have a Trudeau in France." Whether Canada's Prime Minister or Obama will be flattered by the comparison isn't known. But few see this as the end of populism. (SOUNDBITE) (German) TRADER WITH ODDO SEYDLER BANK, OLIVER ROTH, SAYING: "This shows how split France is and also how split Europe is. In the coming weeks we will most likely see some nervousness among investors. I am certain the election in France is going to be much tighter than we are expecting today." (SOUNDBITE) (English) POLITICAL EXPERT AT SCIENCES PO UNIVERSITY, BRUNO CAUTRES, SAYING: "The leader of the far-right is in the second round of a major election. Even if she is not elected, let's say that she would get 40 per cent of the vote, it's going to be a big shock all over Europe anyway." And after Brexit and Trump markets are still fragile - however relieved they may be in the short-term.

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Why markets see Macron as next Obama or Trudeau

Monday, April 24, 2017 - 01:55