Relief as Macron Eclipses Le Pen on TV: French Election Monitor

  • Sovereign default risk falls as euro gains versus peers
  • Opinion polls pick centrist as winner of televised debate

Macron Leads the Pack Following First French Debate

Political risk gauges in Europe eased after anti-EU candidate Marine Le Pen lost ground to her centrist opponent in the French election race when their rivalry moved to TV screens.

The cost of default insurance on French sovereign debt fell while bearish bets on the euro continued to dwindle with the common currency gaining against most of its peers. Independent Emmanuel Macron solidified his standing as a leading contender in opinion polls taken after the debate Monday viewed by about 9.8 million people.

The cost of hedging against CAC 40 Index volatility in the next two months has fallen from a record relative to bets for swings in the Euro Stoxx 50 Index.

In the options market, traders pared bearish bets on the euro against the dollar. Euro-dollar’s two-month risk reversal rate, a gauge of market positioning and sentiment, shows confidence in the common currency bouncing off the lowest level in eight months.

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