In reaction to the French General Election first round results, Timothy Graf, head of macro strategy EMEA, for State Street Global Markets, and Bill Street, head of investments for EMEA at State Street Global Advisors, offer their views:

Timothy Graf, head of macro strategy EMEA, for State Street Global Markets commented: "With Macron heavily favoured in head-to-head polling against Le Pen, it seems most likely that the negative market scenarios – priced in over recent weeks – will recede between now and the run-off. As volatility subsides, spreads between French and German yields should narrow and we look for the euro to build on its recent stability against the dollar.”

Bill Street, head of investments for EMEA at State Street Global Advisors commented: “Le Pen will almost certainly be defeated in two weeks time, and equities can continue to rally going into 2018 as non-existential risks can be absorbed. The global economy might not be booming, but growth is returning.  Some of the moderate risk premia in the bond market will also disappear, and this would most likely benefit lower-quality assets the most.

"There could be more surprises to come in an event-packed European calendar however – UK elections, Greek debt talks, German elections, and the possibility of Italian elections in the not-so-distant future are enough to keep markets busy. Downside protection strategies are crucial given that the environment is likely to remain volatile.”