While a socialist was elected in France because voters paradoxically felt that it was the best way to deal with the aftermath of too much socialism, the results were expected last week and its why French stocks are down modestly and French bond yields are lower with the 10 yr in particular at the lowest in a month. The euro, while lower, is well off its lows and above 1.30 vs the US$ (the euro’s best friend is still Ben Bernanke). Spanish and Italian stocks are actually higher and the European bank stock index is up. The concern this morning is more so Greece where neo nazi’s, communists and socialists gained seats in parliament, giving the leading vote getter, the New Democracy party, no majority. Greek stocks are getting crushed by 7%+ in response. German factory orders rose more than expected m/o/m in March and while somewhat dated of a figure, still points to the resilience of its economy.
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