Markets assess implications of Hollande’s victory in France

The narrow win of Socialist candidate Francois Hollande in the weekend’s presidential election in France was not a great surprise to markets. Here are the initial views from media commentators and financial analysts to the challenge Hollande now faces:

“Quote of the Day” in Britain’s Daily Telegraph newspaper is an early statement from President–elect Hollande: 

“Let’s recognise that the British have been particularly timid about the question of financial regulation and only concerned by the interests of the City. And to that is added a relative indifference to the fate of the eurozone, because Great Britain is protected against speculation since its central bank can intervene directly to finance its debt. Europe is not a cash till and less still a self-service restaurant.”

Matthew Black, Clear Currency:

“The Franco-German relationship, which has been the backbone behind EU policy is certainly in for a turbulent short-term…”

Broker Charles Stanley Research:

“Europe is in a mess, politically, economically and fiscally. Weekend election results in France, Greece and Germany do little to affect the credit crisis actively squeezing the region to death. None of the eurozone’s myriad problems, banks facing severe capital adequacy hurdles by 31st June, tight credit and fiscal austerity, will be reduced by these political choices. The region’s unemployment rate is high and rising. It will not fall any time soon.”

Jane Foley, senior currency strategist at Rabobank:

“The fact that neither the stocks markets nor the EUR went into free fall on the results of the weekend’s elections in both Greece and France will have been greeted with a sigh of relief from both investors and politicians alike.  That said political uncertainty within Europe remains at a heightened level suggesting that the EUR is very vulnerable to another push lower in the coming weeks. Hopefully next week’s meetings between Hollande and Merkel will have signalled the degree to which Hollande would like to inject pro-growth policies into the Fiscal Pact.  Any sign of rife on this point will clearly be very bad news for EMU and the Eurozone.”

Stephen Pope, Spotlight Ideas:

“Do not forget that Chancellor Merkel has to fight regional elections this year and then go to the country in September 2013. She will be distracted and need to focus on her domestic battles with increasing intensity especially as the FDP is crumbling and the opposition SPD and the protest group, Pirate Party are making gains. This will leave Hollande as the new strong man in Europe with a 5 year term of office …this will be especially so if he is able to secure a majority in the elections to the Parliamntary Assembly in June.”

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