France

The most widely monitored ‘fear gauge’ on Wall Street has fallen to its lowest level since 1993, helped by one of the strongest corporate earnings seasons in years, geopolitical risks around North Korea cooling off, and Emmanuel Macron’s French presidential victory removing a possible source of upset across Europe.

The CBOE Volatility Index, better known as the VIX and the most widely followed barometer of expected near-term stock market volatility, closed at 9.77, its lowest close since December 1993, according to Bloomberg data.

The index is the most widely followed barometer of expected near-term stock market volatility and tends to spike when there are potential sources of shock on the horizon. But analysts said this week that there are no obvious risky events immediately in the pipeline and macro-economic data has been relatively robust too.

The French presidential election has delivered a clear win to Emmanuel Macron. With an estimated 65.8% of the votes going to Macron, compared to 34.2% to Marine Le Pen, he is France’s new president. At the same time the election brought the highest rate of protest votes since 1969. 26% of voters abstained and 9% handed in a blank form.

Switzerland’s press and politicians largely consider the election of new French President Emmanuel Macron on Sunday as good news.
Doris Leuthard, Switzerland’s president, said: “On behalf of the Swiss government I congratulate Mr Macron on his election as president of the French Republic. Switzerland and France are linked by a common language and shared values of liberty and democracy. Based on this I am convinced that we will continue our good neighbourly relationship and that our two countries will pursue and deepen our stable and positive cooperation.”

French voters have elected centrist Emmanuel Macron as the country’s youngest president ever, delivering a resounding victory to the unabashedly pro-European former investment banker and strengthening France’s place as a central pillar of the European Union.

Such a comfortable Macron win is in line with what pollsters have been saying for weeks, with most polls saying that the 39-year-old centrist would win with a lead of around 20 points. His final lead, of 31 points, dwarfed even this.

Marine Le Pen, his far-right opponent in the presidential runoff, quickly called the 39-year-old to concede defeat after voters rejected her "French-first" nationalism by a large margin. Macron swept the board geographically, with Le Pen winning just two of France’s 107 departments.

The Swiss National Bank stands ready to defend the franc with interest-rate cuts and market interventions if investors pile into the haven currency in response to the French elections, said SNB President Thomas Jordan said in an interview with Bloomberg Television.

“We hope that a reasonable candidate can win, somebody who is in favor of free markets, but we cannot exclude that there will be more pressure on the Swiss franc,” Jordan explained in Washington, on the sidelines of the International Monetary Fund spring meetings. “But as you know we also have our instruments to react to such a situation.”

Emmanuel Macron, the 39-year-old former banker who quit the Socialists for a remarkable tilt for France’s presidency, has won the country’s first-round vote, finishing just ahead of far-right candidate Marine Le Pen. The French Interior Ministry’s final figures for the vote showed Macron winning 23.75 per cent of the vote, with Le Pen on 21.5.

Francois Fillon for the Republicans, the party of the Gaullist establishment, came third with 19.9 per cent of the vote, just ahead of far-left firebrand Jean-Luc Melenchon with 19.6 per cent.

As of today, all the polls are suggesting that Macron and Le Pen are likely to oppose each other in the second and final round of the presidential vote. The key to victory may come down to a single factor Рvoter turnout in the second round. Assuming that turnout is along the lines of historical standards (about 80%), Marine Le Pen needs to win 18m voices. Polls currently suggest she will win 12m. And yet, the scenario of a very low turnout must be kept on the table, especially if Fran̤ois Fillon makes it through to the second round. Aversion against Fillon is such among leftist voters that they could be tempted to turn in a blank ballot or not vote at all.

French magistrates are investigating 26 individuals or institutions suspected of hiding huge sums of money in tax havens through Panama, the Seychelles, Switzerland, Hong Kong and Singapore. Tax authorities are looking into 416 suspected tax dodgers in an inquiry sparked by last year’s Panama Papers revelations, according to Le Monde newspaper.

The investigators are part of an elite white-collar crime unit set up following revelations that then finance minister Jérôme Cahuzac had dodged tax through a secret Swiss bank account.

UBS will go on trial in France for establishing a wide-ranging tax fraud scheme, legal sources said today. The swiss bank will be charged with illegal banking practices and dissimulating tax fraud, the sources said, adding UBS’s French subsidiary will also go on trial for complicity.

“UBS has made clear that the bank disagrees with the allegations, assumptions and legal interpretations being made,” the bank said in a statement. “We will continue to strongly defend ourselves and look forward to a fair proceeding.”