Euro area: French vote eases political risk – Standard Chartered

The research team at Standard Chartered suggests that the Euro area political risk has eased after the recent French voting.

Key Quotes

“Opinion polls suggest pro-business and pro-Europe candidate Macron is likely to win the second round of the French Presidential elections by a wide margin. This should ease political risk in Europe for now and drive Euro area business and consumer confidence and growth expectations higher, easing deflationary pressures.”        

“ECB tapering increasingly likely by early 2018: Barring an upset in the second round of the French elections, rising Euro area growth is likely to encourage the ECB to start tightening modestly later this year. This could be in the form of tapering bond purchases or higher rates. However, any tightening is likely to be gradual, given still-low inflation.”