The euro took a small hit in the very early hours of Asia trade with news crossing of far-right parties in France and Germany polling very strongly in European Union elections on Sunday. French President Emmanuel Macron called a snap election in response to Marine Le Pen's far-right National Rally gaining seats in the EU parliament. Macron dissolved the national assembly and called legislative elections on June 30 and July 7.

I’ll refer you to this summary from Politico of the election outcome and what’s ahead for the French election, if you'd like more detail:

As for the EUR, concern over increasing uncertainty in EU politics, economics, and markets triggered the run a little lower. Something to bear in mind is that while the far right did well in France and Germany across other parts of Europe they did not:

Back to the EUR, it gapped a little lower and ticked back nowhere near covering that gap. Having said that it has not extended lower. As I post its close to session lows circa 1.0765 and looking precarious.

We had the final reading for Japanese Q1 GDP today, it came in at an appalling negative 1.8% annualised on the quarter. Yes, slightly less appalling that the -2% annualized in the preliminary reading, but this is a huge contraction. The slight improvement was due to a revision for the business capital expenditure component of GDP, which came in at -0.4% q/q in Q1 from the -0.8% decline in the preliminary estimate. Private consumption fell 0.7%. Private consumption accounts for more than half of the Japanese economy, this drop is troubling indeed for Japanese authorities. The Bank of Japan meet this week (statement due Friday) with some chatter of a further tightening via a trimming of Japanese Government Bond purchases (see bullets above). Seems ludicrous in the face of such dreadful data, but there you go.

USD/JPY popped back above 157.00.

There isn’t much to report across major FX. There were minor wiggles. Hong Kong, Australia and China were all out on a holiday today.

eurusd france election 10 June 2024 wrap 2