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Euro hits three-week high as French election looms – business live Euro hits three-week high as French election looms – business live
(35 minutes later)
11.16am BST
11:16
The “nightmare scenario” for global financial markets is second-round duel between the equally sharp-tongued Le Pen and Melenchon, says Associated Press’s John Leicester.
Victory for either could, in the wake of the Brexit vote, possibly deliver a knockout punch to the EU ambition of ever-closer union among the peoples of Europe because both want to tear up agreements that bind together the 28 EU states.
Melenchon says “the Europe of our dreams is dead.” He proposes “disobeying treaties from the moment we take power” and negotiating new EU rules followed by a referendum on whether France should leave the bloc it helped found. “We either change the EU or quit it,” Melenchon’s manifesto says.
The “totalitarian” EU has also long been one of Le Pen’s pet hates and constant target for her virulent nationalist discourse. She wants an in-out referendum on France’s EU membership, a new French franc to replace the common euro currency, and re-imposing French borders to staunch what she describes as out-of-control immigration.
Like her father, National Front founder Jean-Marie Le Pen, in 2002, she hopes for an electoral coup by making the runoff. But pollsters suggest that, like him, she would likely lose on May 7 to any of the other top three opponents.
10.51am BST10.51am BST
10:5110:51
French stock market is rallyingFrench stock market is rallying
Paris’s stock market is on track for its best day since the start of March.Paris’s stock market is on track for its best day since the start of March.
The CAC 40 has jumped by 1% today, outperforming the rest of Europe, as investors react to the latest forecasts of a Macron victory.The CAC 40 has jumped by 1% today, outperforming the rest of Europe, as investors react to the latest forecasts of a Macron victory.
Financial stocks are leading the rally, with BNP Paribas jumping 2.6% and Société Générale gaining 1.9%. Technology and consumer-focused stocks are also up.Financial stocks are leading the rally, with BNP Paribas jumping 2.6% and Société Générale gaining 1.9%. Technology and consumer-focused stocks are also up.
The FTSE 100 is lagging behind, though, partly due to the rise in the pound this morning.The FTSE 100 is lagging behind, though, partly due to the rise in the pound this morning.
Joshua Mahony, Market Analyst at IG, explains:Joshua Mahony, Market Analyst at IG, explains:
The FTSE is weakening once more this morning, as the pound continues its ascent in the wake of Theresa May’s decision to call a snap election in just seven weeks.The FTSE is weakening once more this morning, as the pound continues its ascent in the wake of Theresa May’s decision to call a snap election in just seven weeks.
To many the appreciation of the pound seems counter-intuitive, yet the prospect of a strengthened Tory majority means there is hope that this election could be good for the UK in Brexit negotiations.To many the appreciation of the pound seems counter-intuitive, yet the prospect of a strengthened Tory majority means there is hope that this election could be good for the UK in Brexit negotiations.
10.31am BST10.31am BST
10:3110:31
M&S isn’t the only UK retailer shutting stores.M&S isn’t the only UK retailer shutting stores.
Debenhams has announced plans to close up to 10 shops, and 11 warehouses, as new CEO Sergio Bucher gets to grips with its “tired and old” estate.Debenhams has announced plans to close up to 10 shops, and 11 warehouses, as new CEO Sergio Bucher gets to grips with its “tired and old” estate.
10.12am BST10.12am BST
10:1210:12
UK's Green Investment Bank soldUK's Green Investment Bank sold
Newsflash: The government has announced the sale of Britain’s Green Investment Bank to Australian bank Macquarie in a £2.3bn deal (as my colleague Adam Vaughan reported overnight).Newsflash: The government has announced the sale of Britain’s Green Investment Bank to Australian bank Macquarie in a £2.3bn deal (as my colleague Adam Vaughan reported overnight).
It’s an unpopular move with environmental activists, who question Macquarie’s commitment to clean energy.It’s an unpopular move with environmental activists, who question Macquarie’s commitment to clean energy.
Dr Doug Parr, Policy Director at Greenpeace UK, says:Dr Doug Parr, Policy Director at Greenpeace UK, says:
“At a time when the government should be shoring up low carbon industry for post-Brexit Britain, they have given away one of our key tools for advancing green technologies. The hole left by the Green Investment Bank will slow our transition to a clean energy system, set us back on reaching our climate targets, and mean more of the jobs from new sectors will go elsewhere.“At a time when the government should be shoring up low carbon industry for post-Brexit Britain, they have given away one of our key tools for advancing green technologies. The hole left by the Green Investment Bank will slow our transition to a clean energy system, set us back on reaching our climate targets, and mean more of the jobs from new sectors will go elsewhere.
If the government picks up its pace, the UK could be a world leader in renewable and green technology. But selling a great British success story, which levered private money into eco-projects, to a controversial Australian bank known for asset-stripping, is a disaster. We need investment in the booming clean technology industry in the UK, for skilled jobs, fairer bills and a healthy economy to see us through the next uncertain few years and in to the future.”If the government picks up its pace, the UK could be a world leader in renewable and green technology. But selling a great British success story, which levered private money into eco-projects, to a controversial Australian bank known for asset-stripping, is a disaster. We need investment in the booming clean technology industry in the UK, for skilled jobs, fairer bills and a healthy economy to see us through the next uncertain few years and in to the future.”
The FT’s Jim Pickard suspects the deal is being slipped out under the cover of election fever:The FT’s Jim Pickard suspects the deal is being slipped out under the cover of election fever:
Breaking: £2.3bn sale of Green Investment Bank confirmed - good week to bury one of the most controversial privatisations of recent years.Breaking: £2.3bn sale of Green Investment Bank confirmed - good week to bury one of the most controversial privatisations of recent years.
9.56am BST9.56am BST
09:5609:56
The euro is climbing higher, now up 0.5% to a new three-week high of $1.077.The euro is climbing higher, now up 0.5% to a new three-week high of $1.077.
That’s partly due to general dollar weakness, as well as that French opinion poll suggesting a win for Emmanuel Macron.That’s partly due to general dollar weakness, as well as that French opinion poll suggesting a win for Emmanuel Macron.
9.42am BST9.42am BST
09:4209:42
Retail news: Marks & Spencer is shutting six UK stores, but promising staff that they’ll be offered new positions elsewhere.Retail news: Marks & Spencer is shutting six UK stores, but promising staff that they’ll be offered new positions elsewhere.
M&S is to close 6 stores: Monks Cross, Portsmouth, Slough, Warrington, Wokingham and Worksop promises 380 staff 'guaranteed' redeploymentM&S is to close 6 stores: Monks Cross, Portsmouth, Slough, Warrington, Wokingham and Worksop promises 380 staff 'guaranteed' redeployment
On the upside M&S also says 36 new stores to open over next six months creating 1,400 new jobsOn the upside M&S also says 36 new stores to open over next six months creating 1,400 new jobs
Here’s the statement.Here’s the statement.
UpdatedUpdated
at 9.44am BSTat 9.44am BST
9.37am BST9.37am BST
09:3709:37
European stock markets will probably fall sharply if the French election delivers a shock result.European stock markets will probably fall sharply if the French election delivers a shock result.
Marketwatch’s Sara Sjölin explains:Marketwatch’s Sara Sjölin explains:
And here are the two-way risks: A win for either Le Pen or Melenchon would spark a selloff in risk assets and drive French and European equities down 5%-10% by the end of June, Citi said. However, if Macron or Fillon secures the presidency, stocks in Europe could see a 10%-20% rally before the end of the year, they said.And here are the two-way risks: A win for either Le Pen or Melenchon would spark a selloff in risk assets and drive French and European equities down 5%-10% by the end of June, Citi said. However, if Macron or Fillon secures the presidency, stocks in Europe could see a 10%-20% rally before the end of the year, they said.
"Investors (and French voters) are getting worried about a ‘nightmare’ scenario" - French election is this Sundayhttps://t.co/DJFYKMNP29 pic.twitter.com/KPV1XOSOT7"Investors (and French voters) are getting worried about a ‘nightmare’ scenario" - French election is this Sundayhttps://t.co/DJFYKMNP29 pic.twitter.com/KPV1XOSOT7
9.15am BST9.15am BST
09:1509:15
The pound is also strengthening this morning, up half a cent at $1.2825 against the US dollar.The pound is also strengthening this morning, up half a cent at $1.2825 against the US dollar.
Reuters’ Jamie McGeever has spotted signs that investors are more confident about UK assets.Reuters’ Jamie McGeever has spotted signs that investors are more confident about UK assets.
The yield (or interest rate) on UK gilts (government debt) has fallen in recent weeks, for example, as the price of the bonds has risen.The yield (or interest rate) on UK gilts (government debt) has fallen in recent weeks, for example, as the price of the bonds has risen.
Investors more sanguine on Brexit than at any point since Sept when May first adopted hard Brexit stance. Investors now buying GBP and gilts pic.twitter.com/kKQ3ipubISInvestors more sanguine on Brexit than at any point since Sept when May first adopted hard Brexit stance. Investors now buying GBP and gilts pic.twitter.com/kKQ3ipubIS
9.05am BST9.05am BST
09:0509:05
Marine Le Pen’s best hope of victory would come in a run-off against former prime minister Francois Fillon, argues Antonio Barroso of Teneo Intelligence.Marine Le Pen’s best hope of victory would come in a run-off against former prime minister Francois Fillon, argues Antonio Barroso of Teneo Intelligence.
Barroso believes that many centrist and left-leaning voters might find this choice underwhelming, and not participate in such a second round scenario.Barroso believes that many centrist and left-leaning voters might find this choice underwhelming, and not participate in such a second round scenario.
He writes:He writes:
The worst-case scenario in terms of a potential Le Pen victory is a runoff between Fillon and the leader of the National Front. This is especially the case considering the former PM’s recent “rightist turn” after he suggested he would include members of an ultra-catholic organization in his administration.The worst-case scenario in terms of a potential Le Pen victory is a runoff between Fillon and the leader of the National Front. This is especially the case considering the former PM’s recent “rightist turn” after he suggested he would include members of an ultra-catholic organization in his administration.
Combined with his frequent attacks on the judiciary, this will only make it more difficult for Fillon to credibly moderate his positions in between rounds. The risk is that center-left voters decide to stay at home on 7 May, allowing Le Pen to be elected by voter neglect rather than by voter endorsement.Combined with his frequent attacks on the judiciary, this will only make it more difficult for Fillon to credibly moderate his positions in between rounds. The risk is that center-left voters decide to stay at home on 7 May, allowing Le Pen to be elected by voter neglect rather than by voter endorsement.
Barroso also agrees that Macron would be a much tougher opponent for Le Pen.Barroso also agrees that Macron would be a much tougher opponent for Le Pen.
8.54am BST8.54am BST
08:5408:54
This chart confirms that traders have been anxious about the French elections, and the prospect of a eurosceptic winner:This chart confirms that traders have been anxious about the French elections, and the prospect of a eurosceptic winner:
As Sunday's 1st round of French election nears, one measure of euro volatility is well on track for its biggest weekly jump on record pic.twitter.com/As4mdjhyEZAs Sunday's 1st round of French election nears, one measure of euro volatility is well on track for its biggest weekly jump on record pic.twitter.com/As4mdjhyEZ
8.47am BST8.47am BST
08:4708:47
Tactical voting will probaly keep Marine Le Pen out of the Élysée Palace, argues Kit Nicholl, country risk analyst at IHS Global Insight:Tactical voting will probaly keep Marine Le Pen out of the Élysée Palace, argues Kit Nicholl, country risk analyst at IHS Global Insight:
In a scenario where Le Pen is pitted against Fillon, or more likely, Macron, voters from the moderate left and right are likely to unite in a so-called “Republican front”, voting tactically to keep the FN out of power.In a scenario where Le Pen is pitted against Fillon, or more likely, Macron, voters from the moderate left and right are likely to unite in a so-called “Republican front”, voting tactically to keep the FN out of power.
A Le Pen victory is therefore unlikely but still remains possible, particularly as abstention rates will also play a big role.A Le Pen victory is therefore unlikely but still remains possible, particularly as abstention rates will also play a big role.
Furthermore, the occurrence of a major terrorist attack, widespread urban riots, or the disclosure of damning information aimed at discrediting Macron would all have the effect of significantly increasing the FN’s share of the vote.Furthermore, the occurrence of a major terrorist attack, widespread urban riots, or the disclosure of damning information aimed at discrediting Macron would all have the effect of significantly increasing the FN’s share of the vote.
8.37am BST8.37am BST
08:3708:37
Euro hits three-week highEuro hits three-week high
The euro has hit its highest level since the end of March this morning.The euro has hit its highest level since the end of March this morning.
The single currency gained 0.3% against the US dollar to $1.074, after a new opinion poll suggested centrist candidate Emmanuel Macron will win the French election.The single currency gained 0.3% against the US dollar to $1.074, after a new opinion poll suggested centrist candidate Emmanuel Macron will win the French election.
Harris Interactive placed Macron on 25% support ahead of Sunday’s first round of voting, ahead of Marine Le Pen (22%).Harris Interactive placed Macron on 25% support ahead of Sunday’s first round of voting, ahead of Marine Le Pen (22%).
Republican candidate Francois Fillon (19%) and left-winger Jean-Luc Melenchon (also 19%) followed behind.Republican candidate Francois Fillon (19%) and left-winger Jean-Luc Melenchon (also 19%) followed behind.
Il ya de nouveau UNE VRAI DYNAMIQUE MACRON "BERCY" Sondage HARRIS AUJOURD'HUI comme BVA hier et assurément ODOXA demain Mais IFOP a du MAL⬇️ pic.twitter.com/7HwMo3XuqWIl ya de nouveau UNE VRAI DYNAMIQUE MACRON "BERCY" Sondage HARRIS AUJOURD'HUI comme BVA hier et assurément ODOXA demain Mais IFOP a du MAL⬇️ pic.twitter.com/7HwMo3XuqW
Harris also see Macron comfortably beating Le Pen in the second round of voting in May.Harris also see Macron comfortably beating Le Pen in the second round of voting in May.
#FRANCE'S MACRON TO BEAT LE PEN IN 2ND-ROUND 66% VS 34%: HARRIS - BBG#FRANCE'S MACRON TO BEAT LE PEN IN 2ND-ROUND 66% VS 34%: HARRIS - BBG
The euro has been under pressure from predictions that either Le Pen or Melenchon (or even both) might contest the run-off, as both are extremely critical of the EU and could potentially trigger Frexit.The euro has been under pressure from predictions that either Le Pen or Melenchon (or even both) might contest the run-off, as both are extremely critical of the EU and could potentially trigger Frexit.
I’ll pull together some reaction now....I’ll pull together some reaction now....
8.20am BST8.20am BST
08:2008:20
The agenda: Political worries lingerThe agenda: Political worries linger
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Political issues continue to occupy the market’s attention today.Political issues continue to occupy the market’s attention today.
The first round of the French presidential election is just three days away, so investors are watching closely to see which candidates make it through to the run-off two weeks later.The first round of the French presidential election is just three days away, so investors are watching closely to see which candidates make it through to the run-off two weeks later.
The race looks rather tight, raising concerns that the eurozone could be dragged into another crisis if the more mainstream candidates stumble.The race looks rather tight, raising concerns that the eurozone could be dragged into another crisis if the more mainstream candidates stumble.
Neil Wilson of ETX Capital explains:Neil Wilson of ETX Capital explains:
Volatility in the euro has peaked at its highest since before the June referendum as markets weigh the prospects of either Marine Le Pen or Jean-Luc Melenchon – or both - making the second round. The killer scenario for the euro would be if both candidates make the May 7th runoff as it would raise the very real possibility of France exiting the euro.Volatility in the euro has peaked at its highest since before the June referendum as markets weigh the prospects of either Marine Le Pen or Jean-Luc Melenchon – or both - making the second round. The killer scenario for the euro would be if both candidates make the May 7th runoff as it would raise the very real possibility of France exiting the euro.
Current polling gives the nod to Macron and Le Pen, with Macron eventually winning. But with four candidates polling around 20% there is every reason for caution. We’re looking at contingency plans in the event of a Le Pen-Melenchon runoff as this would spark a big selloff in the euro and French government bonds, as well as bank stocks.Current polling gives the nod to Macron and Le Pen, with Macron eventually winning. But with four candidates polling around 20% there is every reason for caution. We’re looking at contingency plans in the event of a Le Pen-Melenchon runoff as this would spark a big selloff in the euro and French government bonds, as well as bank stocks.
Britain’s general election also looms over the City, of course, as traders try to calculate the consequences. The latest front pages suggest Theresa May is determined to make Brexit the centrepoint of the campaign:Britain’s general election also looms over the City, of course, as traders try to calculate the consequences. The latest front pages suggest Theresa May is determined to make Brexit the centrepoint of the campaign:
Ah yes, that 'softer' Brexit... pic.twitter.com/Rw7YDe5nKOAh yes, that 'softer' Brexit... pic.twitter.com/Rw7YDe5nKO
Overnight, Asian shares have been boosted by some solid trade data from Japan.Overnight, Asian shares have been boosted by some solid trade data from Japan.
Exports jumped at the fastest pace in two years in March, raising hopes that rising demand from overseas could help the sluggish Japanese economy.Exports jumped at the fastest pace in two years in March, raising hopes that rising demand from overseas could help the sluggish Japanese economy.
Good morning. Asia stocks strengthening on short covering into French election this weekend. Strong Japan trade data props up stock markets. pic.twitter.com/2ADGZyzBq0Good morning. Asia stocks strengthening on short covering into French election this weekend. Strong Japan trade data props up stock markets. pic.twitter.com/2ADGZyzBq0
There’s plenty of corporate news too, including results from Unilever, Debenhams, and Sky.There’s plenty of corporate news too, including results from Unilever, Debenhams, and Sky.
On the economics side, there’s eurozone construction figures at 10am BST, the weekly US unemployment report at 1.30pm, and eurozone consumer confidence stats at 3pm.On the economics side, there’s eurozone construction figures at 10am BST, the weekly US unemployment report at 1.30pm, and eurozone consumer confidence stats at 3pm.