Euro made a correction, after Le Pen lost the second TV debate

A much anticipated second TV debate ahead of the first round of the presidential elections in France (23 April) failed to provide a turnaround that could unsettle markets. Macron had another solid appearance and Le Pen was not convincing as her grip on French presidency could be fading away.

The debate included six minor candidates which did not serve Le Pen well as she was criticized from all sides. Not only Macron and Fillon slammed her on Europe but she was also undermined from the right side with Francois Asselineau accusing her of not being tough enough on Europe.

A snap survey after the debate showed that a current favorite to win the second round a "market friendly outcome" Emmanuel Macron was seen as the candidate with a most comprehensive program and at the same the the second most convincing candidate during the debate. Interestingly the poll pointed to a far-lest Jean-Lub Melenchon as the most convincing candidate. He did well during the first debate and has been on the rise recently which could have halted Macron’s progress in polls. However, Le Pen was only the fourth most convincing with a large gap to the top 3 rounded by Francois Fillon who was looking for a chance regain his momentum heading to the first round.

There was no spectacular market reaction. Investors seem to assume that things are under control for now but with nearly three weeks left until the first round much can happen. EURJPY recovered somewhat from the lows but it partly reflects improved fundamentals.

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