Daily Dose, EU

Concern Over France Widens Across Europe Stock Rout – Europe Market Wrap

Concerns over the political unrest in France continued to rise, sending European equities into their worst week since October. US market futures fell as investors looked for safe havens.

The Stoxx 600 fell 0.8%, bringing its losses from Monday to 2.2%. This year’s gains were completely erased by France’s CAC 40 index, with the largest losers being banking companies like Société Generale and BNP Paribas. The Euro hit its lowest level compared to the US currency since April.

With the S&P 500 and Nasdaq 100 setting new highs every day this week, they are expected to open lower. Treasury rates dropped four basis points, but a measure of the Dollar’s value relative to other major world currencies increased.

Following his party’s crushing defeat in the European Parliament elections, French President Macron pushed for a hasty election, which has caused European markets to become increasingly uneasy. Investors worry that laxer fiscal policies will be implemented if Marine Le Pen’s far-right National Rally Party, which is leading surveys by a significant margin.

After delaying information about its reduction in bond purchases until its July meeting – a move widely interpreted as a postponement of policy normalisation – the BoJ caused the Yen to weaken once again. Governor Ueda, however, disputed the notion that a rate hike was out of the question for the upcoming month.