Zero Hedge Update - "Good Luck France, You Just Elected a Rothschild Puppet" - May 7th 2017

Published by Tyler Durden on May 7th 2017

Update: As Emmanuel Macron arrived in the courtyard of Paris's Louvre museum to deliver his victory speech to thousands of supporters, the European Union's anthem "Ode to Joy" played in the background.

"Tonight, France won," he said to rapturous crowds, adding that "Europe and the world are watching us." Macron said, cited by the Telegraph, that France is facing an "immense task" to rebuild European unity, fix the economy and ensure security against extremist threats.

"Our task is huge and it will require the courage of truth” he repeated. Speaking to thousands of supporters from the Louvre Museum's courtyard, Macron said that Europe and the world are "watching us" and "waiting for us to defend the spirit of the Enlightenment, threatened in so many places."

“We have the force, the will… we will not give into fear, into lies… to the love of decline and defeat”

Macron said  "everyone said it was impossible. But they didn't know France!" and promised to work to unify France after a bruising presidential campaign and serve the country "with love."

He also vowed to the French public: "I will protect you in the fact of threats" and said “I will respect what everyone thinks and believes, because I want the unity of our country. I will serve you with humility, strength and in line with our motto: liberty, equality, fraternity… I will serve you with love.”

His wife Brigitte then came up on stage with him, and she kissed his hand and waved to the crowd.

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Live Feed from France 24:

After an extraordinary election campaign full of twists and turns, Emmanuel Macron won a dramatic victory over Marine Le Pen in the French presidential election, taking 65% of the vote, with Le Pen collecting just over a third according to estimates from four separate French pollsters. Macron, 39, will become the youngest president of France's Fifth Republic.

As BBG notes, the firms sampled real votes as they were being counted and weighted their results to reflect the composition of the French electorate. Their projections were all within 1 percentage point. Indeed, all early polls all show Macron with at least 65% of the vote:
  • Elabe: 65.9%
  • Ifop: 65.5%
  • Ipsos: 65.1%
  • Kantar: 65.0%

Abstention in Sunday’s election was expected to hit 26%, the highest rate since 1969, reflecting a lack of enthusiasm among many voters for the choice on offer.
Macron was grateful and generous in his victory speech:
"Thank you from the bottom of my heart to all those who voted for me," begins Mr Macron in his victory speech. 

"I salute my adversary Ms Le Pen, I know why people chose to vote for an extreme party. I know the doubt, the fear they expressed.

"And it is my responsibility to take on those concerns and guarantee our unity and responsibility for our country.

"From tomorrow we will modernise politics, recognise pluralism, revitalise democracy. This will be my first mission, respecting everyone."
Althought there was one small glitch...

Moments after the results were announced, Le Pen conceded to Macron in a phone call and vowed to become major force of opposition,
“The French have elected a new president and opted for continuity,” Le Pen told supporters just outside Paris. “I wish him success in the face of great challenges,” she said.

The AFP reports that it has spoken to Macron since the election results. France’s president-elect says “a new page has turned, that of hope and of restored confidence”.

The reactions to Macron’s win are coming in fast and hard: French President François Hollande, former Prime Minister Manuel Valls, German Chancellor Angela Merkel, British PM Theresa May are just some of the major political figures and leaders who have been congratulating modern France’s youngest president-elect over the past few minutes.

European leaders hailed Macron's victory as a vote for European unity and a blow to political forces that had sought to build on last year's Brexit vote to tear apart the European Union.

"Your victory is a victory for a strong united Europe and for German-French friendship," German Chancellor Angela Merkel's spokesman Steffen Seibert tweeted to Macron shortly after the election results were published.

Donald Tusk, the former Polish prime minister who chairs summits of European leaders, tweeted: "Congratulations to French people for choosing Liberty, Equality and Fraternity over tyranny of fake news" - an apparent reference to misleading stories about Macron that were spread on social media in the run-up to the vote.

In a tweet from her spokesperson, British Prime Minister Theresa May warmly congratulated Macron. "France is one of our closest allies and we look forward to working with the new President on a wide range of shared priorities," she said.

Italian Prime Minister Paolo Gentiloni tweeted: "Hurrah Macron President! There is hope for Europe!"

Even President Trump endorsed Le Pen in the election, but just fired off this conciliatory tweet:

Geert Wilders, who stood as a Right-wing populist in the Dutch elections but lost out to Mark Rutte, has offered his commiserations to Ms Le Pen. He went on to predict both of them would win in the next election.

As Reuters adds, Europe's political establishment limped into 2017 fearful that the Trump and Brexit votes, fueled by anger over immigration and rising economic inequality, could be replicated on the European continent in a mega-election year in which the Dutch and Germans were also voting. As a result, the election in France, the second largest economy in the euro zone after Germany, was always seen as the litmus test for European politics. Had Le Pen won, many European officials acknowledged, it may have been the beginning of the end of the EU, Europe's 60-year-old experiment in closer integration which delivered peace and prosperity for decades before succumbing to a series of crises over the past decade.

As the FT put it. Macron’s victory is a "phenomenal achievement" for the 39-year-old former Rothschild banker, who has never before held elected office and whose political movement En Marche! was set up barely a year ago. He becomes the youngest ever French president.

As for, Le Pen, she fell short of the 45% that she was projected to win at one point earlier in the year. But her score of 34.9% is almost twice the 18% won by her father Jean-Marie Le Pen in 2002, and points to a depth of disaffection and anger towards France’s political elite that could nourish the far-right for years to come, especially if President Macron fails to deliver on his promises.
Macron, a former government adviser and economy minister in the Hollande administration, will now turn his attention to elections for the National Assembly on June 11 and 18. He needs to build a stable majority from a party that as yet has no MPs. On Friday, he said he already had in mind his nominee for prime minister, a choice that could help him build alliances with MPs from other parties.

Shortly after the results were announced, BuzzFeed reported that LePen's Front National is going to re-brand, and change its name after the election result. Le Pen said that "The National Front ... must deeply renew itself in order to rise to the historic opportunity and meet the French people's expectations. I will propose to start this deep transformation of our movement in order to make a new political force."
Meanwhile, the Leave EU campaign, which presumably preferred a Le Pen victory over Macron, has just tweeted the following picture and message:

* * *

Macron's victory is in line with expectations, which according to several banks carries a "sell the news" risk, especially in EURUSD.

In a note released earlier on Sunday, Barclays' Giovanni Paci writes that "a Macron victory, in line with current polls, in the second round of the French Presidential election, carries risk of a “buy the rumor, sell the fact” downside move in EURUSD, given the current long EUR pre-positioning." On the other hand, "this outcome would also likely bring temporary relief and a further reduction in volatility." Because a VIX of 10 is high?

Some further details below:
Macron victory in line with polls carries risk of a “buy the rumor, sell the fact” downside move in EURUSD, given the current long EUR pre-positioning. The EUR political-risk premium was reduced significantly by the “benign” first round outcome, which supported a c.2% EUR NEER appreciation. EURUSD should depreciate mildly over the remainder of this year, as monetary policy divergence and some residual political-risk premia weigh on the common currency.

With market attention to the ‘Politics of Rage’ likely to fade after the French election, and no other clear themes visible, we see risk of a significant decline in market volatility. Implied volatility is low across asset classes (Figure 1) and, for most major currencies, realized and implied volatility measures are well below their yearly averages (Figure 2). Although we do not believe the Politics of Rage has yet crested, the outcome of the Dutch elections and the expected victory of Emmanuel Macron in France, are likely to assuage market fear of radical political change, at least for the near term, as no other clear risk events are visible. Risk-taking began to deteriorate earlier this year as ambiguity brought about by the ‘Politics of Rage’ dampened strategic risk taking. However, the resolution of near-term risks, with no other clear themes or major risk events to trade tactically, is likely to take activity and volatility further down.

... the election of Mr. Macron as president, combined with a potential hung parliament would leave in place long-held concern about reform, but remove acute risks that provided shorter-term trading opportunities. As long as short-term events bring about temporary relief and long-term risks, volatility is likely to remain depressed, but prone to sudden bursts.
* * *
Deutsche Bank's director of FX strategy, Sebastien Galy, has chimed in with a similar tak saying that while EUR/USD will likely gap higher, looking to clean out the stop losses,  before eventually consolidating lower. He adds that equity flows are likely to increase into the euro zone,‎ but that will take time as much is already priced in.

* * *
Expect more sellside commentary as analysts react to the initial results.
Here is another live feed, this time from the Telegraph:


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