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1st round French election winners

First round winners in the French elections are in. Emmanuel Macron and Marine Le Pen will be going head to head in the second round on May 7th. Socialist Benoit Hamon, and center-right Francois Fillon, have aligned their endorsement with Macron. According to a snap Ipsos poll released yesterday, the race is veering Macron's way with 62 percent of the vote compared to Le Pen's 38 percent.

The market has already been reacting to these developments as Gold sank to a seven-week low at $1,265.51 an ounce- a 1.5% drop. The Euro gained 1.3% as Macron cemented his lead, putting traders' minds at ease regarding a potential threat to the Euro Zone from a central economy, at least for now. While this is a positive move for the Euro, it is still not the ideal outcome of Fillon-Macron that traders were hoping for and therefore we are seeing a fairly measured market reaction.

A Macron win would also pave the way for relief experienced by more than just the markets. The European Central Bank and the Swiss national Bank have been on high alert, preparing for possible extreme measures to stabilize currencies, and can now stand down. The Domino affect started by Brexit and the Trump election is also still in play. As the outcome of the Dutch election promised to affect the French election, so does the French election still bear weight on the upcoming elections in Germany. France and Germany are no doubt major players in the Euro Zone economy and therefore a swing in one, or scarily, both would have immediate repercussions to the global economy.  

Should Le Pen achieve an upset in the two weeks up until the second round, the Euro faces substantial risk. Analysts have warned that we could be looking at a 15-year drop for the currency, not to mention a reaction reminiscent of post-Brexit. Though markets have shown a sigh of relief and significant drop in expectations for an upset in the second round, it would not be wise to rest too easy as we have already seen such improbable and undesirable impossibilities become realities. 

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