Far-right French leader Marine Le Penhas said she will not call on French President Emmanuel Macron to resign if her party wins the snap parliamentary elections. Commerzbank AG Head of FX Research Ulrich Leuchtmann joins Catalysts to break down the news and how markets should prepare for the snap election.
"I think the general perception of the market is, yes, it can get more complicated, especially for crisis times if they come up somewhere in the future. But this is only a problem at the margin from the FX markets perspective. And I think the market is not pricing in any catastrophic risk at the moment on the political side in Europe," Leuchtmann explains.
He adds that "euphoria regarding the euro" may become a problem: "What would happen if we would see a new eurozone crisis like in 2010, 2012? Would new, more euro-skeptic governments be willing to create bailout mechanisms as they did pass then? And if not, what would be the consequence of the crisis?" He adds that the concern isn’t about the short-term future of the euro, but the euro in a time of crisis.
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