The euro, French bonds, and stocks experienced sharp declines following French President Emmanuel Macron’s call for a snap parliamentary election after a significant defeat by the far-right in the EU vote, Reuters reports.
The euro fell 0.5% to a one-month low against the dollar and to a 21-month low against sterling. French blue-chip stocks dropped 2%, with major losses in banks like BNP Paribas and Societe Generale, making the CAC 40 the worst-performing index in Europe. French government bond prices fell, pushing 10-year yields close to their highest this year at around 3.19%.
Macron’s decision to call a parliamentary election, set for June 30 and July 7, introduces uncertainty to the markets. If the far-right National Rally wins a majority, Macron would lose influence in domestic affairs. This uncertainty has negatively impacted market confidence, with French bank shares and bonds being particularly affected.
