EUR feeling the pinch - AmpGFX

According to Greg Gibbs, Director at Amplifying Global FX Capital, EUR may be starting to feel the pinch from the coming French election and the merry-go-round on the Greek bailout package. (First round of French election on 23 April, final two runoff on 7 May).

Key Quotes

“The betting odds of winning the final French Presidential election for the top three candidates shows that it appears to be an even race, with the favorite Macron’s probability of winning falling back close to Marine Le Pen and Fillon.  It appears likely that Le Pen will make it through the first round of voting to the final run-off.”

“There has again been some widening in Periphery Eurozone Government bond spreads in recent days.  The French spread has risen to a cyclical high.”

“Credit Default Swap indices show under-performance in European investment grade corporate risk (higher CDS) relative to US corporates and emerging markets.”

“EUR failed to draw much support from its preliminary PMI data, rising to new cyclical highs for both services and manufacturing.  Whereas the preliminary Markit USA PMI data were softer.”