France’s surprise shift from far-right to far-left [Video]

The second round of French legislative election brought new surprises on the table – to say the least. Not only Marine Le Pen’s far-right National Rally didn’t win a majority but the New Popular Front – which is a leftist coalition led by the far-left Jean Luc Melonchon – secured the biggest share of the cake, and did too well to soothe investors’ concerns regarding stability and the predictability of the French politics and the good health of the French finances. The market reaction was a swift fall in the euro at the open, the franc gained on the back of an early flow of capital to its safety, but the EURUSD recovered most of losses before the Europeans have stepped in.

In equities, shares of French banks will particularly be in focus. dividends and share buybacks.

Across the Atlantic, last week ended with heightened hope of Federal Reserve (Fed) rate cuts on Friday’s soft jobs data. Later this week, Fed Chair Jerome Powell’s semiannual testimony and the release of the all-important US CPI update will take the center stage.