Jane Foley, Senior FX Strategist at Rabobank, explains that France’s President Macron appointment of new Prime Minister could be crucial in how successful the new leader will be in next month’s parliamentary elections.
“Perhaps in reflection of the newness of his own La Republique En Marche political party, but also in view of the need of the President to capture support from the conservative opposition, the most likely candidate is expected to come from the centre-right Republican Party. Edouard Philippe, the mayor of Le Havre is currently the bookie’s favourite.”
“Macron will then travel to Germany to meet with Chancellor Merkel. Last week Merkel pushed back against the idea that Macron’s Presidency should be supported by any change in Eurozone spending rules. Macron’s reformist vision for Europe, however, has picked up some steam with Spain’s Pais newpaper today reporting there is Spanish government support for a Eurozone banking union and deeper economic integration. Despite the apparent differences between Macron and Merkel on the extent of Eurozone reform, today’s meeting between the two pro-EMU leaders is not expected to yield any particular concerns for the market.”
“Ahead of Germany’s national elections in September, Merkel has had her hand strengthened over the weekend by the results of the regional election in North Rhine-Westphalia. Aided by a buoyant economy, Merkel appears to be putting last year struggles with the immigrant crisis behind her. Next week the Chancellor will participate in NATO and G7 summits.”