The euro skidded while stock and bond futures slipped on Monday, as French President Emmanuel Macron called a shock election after being trounced in the European Union vote by the far-right.
Making a risky gamble to reestablish authority, Macron called a parliamentary election with the first round on June 30. “The prospects of a far-right victory in France’s snap elections may keep the euro under pressure in the near term,” said Mansoor Mohi-Uddin, chief economist at Bank Of Singapore, though US data and policy will be the main driver.While the euro and euro area assets have been largely cushioned by diminished euro-scepticism compared with elections in the 2010s and early 2020s, the results and surprise reaction from France could be a wake-up call.
But he noted that EU election results do not always translate into domestic election results, due to different election systems and as European elections tend to attract a larger protest vote.