The markets can now relax a little, as centrist Emmanuel Macron beat Marine Le Pen in the French presidential elections. The Euro climbed to six-month highs against the USD on the back of the win, breaking the $1.10 barrier. Market participants will likely focus on European fundamentals and the European Central Bank’s move to taper its stimulus program as political uncertainty in the region has been tempered.
As expected, the FOMC left rates unchanged at its meeting last week. Despite U.S. GDP growth being less than stellar for the first quarter of 2017, the committee did not seem particularly concerned with the data. The Fed will likely be on track to hike rates in June, particularly as job growth bounced in April and the unemployment rate dropped to near 10-year lows to 4.4%.
The 10-year treasury saw its biggest weekly climb in two months, closing seven basis points higher to 2.363% on the back of the jobs data and FOMC meeting.
Here is what the Street has in store this week:
- While there is some economic data to be released, including treasury auctions, market practitioners will pay particular close to attention to inflation data to be released at the end of the week: inflation data for manufacturing on Thursday with retail and consumer following on Friday.
- Fed officials scheduled to speak include: Evans, Kashkari, Bullard, Rosengren, Dudley, Harker, Kaplan and Mester.
