The very strong relief rally following the French elections caused stock markets globally to climb upwards. The election outcome was in line with polls, with pro European Candidate Macron probably gaining the Presidency with a 60% chance on May 7th. With political uncertainty related to the French presidential election cleared (for now at least), focus is likely to turn to the US, where President Trump has announced that he will present his tax plans on Wednesday. Markets will also focus on Thursday’s ECB meeting.
The US session saw the S&P 500 and Dow Jones close with gains of over 1%. More impressively, the French CAC40 gained 4.14% – a 9 year high, while the German DAX climbed 3.37% at record highs. This morning, DAX opened even higher, but at these levels it is prone to profit taking.
The EUR/USD maintained its gains and stabilized at 1.0870 after dropping as low as 1.0825. EUR/USD gapped higher to 1.09 from 1.07 levels on Friday after the results of the election. USD/JPY also stabilized over 110 from 1.09 levels last Friday. There was little market reaction after media reports said North Korea put on a massive live-fire drill on Tuesday. Gold was trading almost flat at 1,272 mark while silver was trading at $17.87.
The Canadian dollar fell 0.4% after U.S. Commerce Secretary Wilbur Ross said his agency will impose new anti-subsidy duties averaging 20% on Canadian softwood lumber imports.
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