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Euro Becalmed As France Simmers

Published 25/04/2017, 09:02
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Anti-Fascist sentiment rises to the surface.

The French penchant for protest had been absent from this election until the reality of an extreme right-wing candidate appearing in the runoff was confirmed.

France has been suffering from terrorist attacks linked to Islamic extremism for more than two years, but the population has longer memories.

There is an underlying socialist mentality in France that will occasionally lean towards the right of centre but cannot allow a candidate with the extreme views of Marine le Pen to rise to the top.

Following the first ballot on Sunday, which saw Emmanuel Macron and Le Pen poll most votes, France has been mobilized in an anti-Fascist series of events. First police detained 29 protesters as students took to the streets. Then many of the defeated candidates from Sunday’s poll stood firmly behind Macron in an effort to defeat Le Pen.

The euro drifted back into its “well-trod” range following a rally on Sunday night after the result.

Brexit silence broken by European Council

Assuming she wins the General Election, UK Prime Minister Theresa May will open formal negotiations with the European Union in June highlighting banking and financial services as the first areas she wants ring-fenced by any agreement.

Several European capitals such as Frankfurt have long envied the position of the City of London in the global financial market and will lobby hard to ensure that that position is weakened following Brexit.

The European Council has already toughened its stance over the City having unfettered access to the European Single Market for financial services.

A draft of the initial negotiating position has already been toughened up with France and Germany looking to ensure that the City continues to be governed by regulations originating in Brussels. It could prove disastrous for the Paris and Frankfurt financial markets if London were to be seen to be governed by a more liberal set of regulations.

A new label has been invented: the remaining members are now called the “EU27”. Brussels probably paid some image consultancy millions to come up with that one.

Scots seemingly lukewarm on referendum

In what was admittedly a relatively small sample size, an opinion poll of Scots released yesterday found that only 26% of Scots want a second referendum on independence held in either Autumn 2018 or Spring 2019. 18% want it delayed (assumedly until after Brexit is complete). However, the most damning number for Nicola Sturgeon is that 48% don’t want a second referendum at all.

It is likely that the result will be spun by the Scottish Nationalists but if this sentiment is carried through in the general election, an even larger than expected majority for the Conservatives could be on the cards.

Sterling has managed to hang onto most of its post-election announcement gains remaining in a narrow range against the dollar. The euro has been more volatile given the multitude of drivers for both currencies currently. Sterlinghad its worst day since January against the single currency yesterday but politics, if not economics, favour the pound over the coming months.

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