European Stocks and Euro Fall Amid Political Instability
By Adrian Kerr
European stock markets and the euro fell early Monday following the advance of far-right parties in European elections and major losses for President Emmanuel Macron's alliance that prompted him to call a snap election.
In early trade, the euro slipped 0.5% against the dollar to a one-month low of $1.0747, according to Factset, while France's bluechip CAC 40 index fell 2%. The biggest fallers were banks, with Societe Generale, BNP Paribas and Credit Agricole all down more than 4%. The pan-European Stoxx 600 fell 0.8% in opening trade.
Meanwhile, France's 10-year bond yield traded 5.5 basis points higher at 3.170%, while the 10-year Bund yield rose 1 basis point at 2.630%, according to Tradeweb.
The euro had already weakened on Friday as the dollar firmed on strong U.S. jobs data, a key input ahead of the Federal Reserve's policy meeting this week.
"The advance of the populist right and the French snap elections will further complicate decision-making in the multinational EU at a time when Europe needs to get its act together to stop Putin, enhance competitiveness, protect the climate, manage immigration, deal with China and prepare for a potential second term of Donald Trump in the U.S.," Berenberg economist Holger Schmieding said.
France's far-right opposition party National Rally looked set to be among the pan-European election's biggest winners late Sunday. Marine Le Pen's party appeared on target to become the largest single party in the European Parliament, even as the mainstream pro-European Union parties looked to have kept their lock on power in Brussels.
After the French results, Macron announced that he was dissolving parliament to call fresh elections. The first round will take place June 30, followed by a second on July 7, Macron said on Sunday.
Write to Adrian Kerr at adrian.kerr@wsj.com
(END) Dow Jones Newswires
June 10, 2024 04:02 ET (08:02 GMT)
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