French election


Political risk rears its head this week as we approach the French presidential election on Sunday, April 23rd. A key moment for France, it is also a potential watershed for the Eurozone. A win for Marine Le Pen, though polls show is unlikely, could spark France’s exit from the single currency and a possible breakup of the Eurozone. Polls indicate she will win the first round on Sunday but come second in the May 7th run-off vote.

Credit Suisse dubbed the elections the “greatest existential risk for Europe”, while JPMorgan boss Jamie Dimon in his annual letter to shareholders warned that following Brexit, there is the potential for the EU to “split apart”.

How to trade it? The euro is a proxy for the political risk, rising when markets expect Le Pen to lose, falling when the chance of her winning rises. As such there expected to be significant volatility in euro currency pairs before and after the April 23rd vote.



Ahead of the French vote, it’s a very busy week on Wall Street as US earnings season hits full speed. Tech darling Netflix reports on Monday before a bevvy of Dow components – Goldman Sachs, IBM, Johnson & Johnson and UnitedHealth - release Q1 numbers on Tuesday. Visa, American Express and General Electric are among the other large caps in action.

A lot is riding on earnings at present. Average EPS growth for the S&P 500 is expected to hit 9%, the highest since 2011. Anything less might hit investor sentiment and see US stock valuations slide. As the chart shows, on the ten-year cyclically US stocks have only been this expensive twice in their history – before the Wall Street crash of 1929 and before the dotcom bubble burst in 2000.

Shiller PE Ratio




On the macro front, we have flash manufacturing and services PMIs for the Eurozone on Friday alongside UK retail sales data. Ahead of these markets will look to the big China GDP and industrial production figures on Monday. Final CPI data for the Eurozone on Wednesday will be watched closely after flash estimates showed a sharp reversal for inflation last month.


Economic Calendar

(All times BST)

Monday, 17 April

All day – Easter Monday bank holiday

00:01 – UK Rightmove house price index

03:00 – China GDP and industrial production data

13:30 – Empire State manufacturing index

Tuesday, 18 April

02:30 – RBA monetary policy meeting minutes

13:30 – US building permits, housing starts

14:15 – US capacity utilization rate, industrial production


Wednesday, 19 April

10:00 - Eurozone final CPI inflation

13:30 – Canada wholesale sales

15:30 – US crude oil inventories

19:00 – Fed Beige Book

23:45 – New Zealand CPI inflation

Thursday, 20 April

02:30 – Australia NAB quarterly business confidence

13:30 – US Philly Fed manufacturing index, weekly unemployment claims

Friday, 21 April

08:00 – French flash manufacturing & services PMIs

08:30 – German flash manufacturing & services PMIs

09:00 – Eurozone flash manufacturing & services PMIs

09:30 – UK retail sales

13:30 – Canada CPI inflation, retail sales

All day – World Bank and IMF meetings start

Saturday, 22 April

All day – World Bank and IMF meetings continue

Sunday, 23 April

All day – French presidential election

All day – Conclusion of World Bank and IMF meetings


Corporate Calendar


Monday, 17 April

Netflix (NFLX) – Q1/2017, EPS estimate 0.372


Tuesday, 18 April

Bank of America Corp (BAC) – Q1/2017, EPS estimate 0.350

Goldman Sachs (GS) – Q1/2017, EPS estimate 5.026

Harley Davidson (HOG) – Q1/2017, EPS estimate 1.015

International Business Machines (IBM) – Q1/2017, EPS estimate 2.349

Johnson & Johnson (JNJ) – Q1/2017, EPS estimate 1.761

UnitedHealth Group (UNH) – Q1/2017, EPS estimate 2.170

Yahoo! Inc (YHOO) – Q1/2017, EPS estimate 0.141

Wednesday, 19 April

American Express (AXP) – Q1/2017, EPS estimate 1.278

eBay (EBAY) – Q1/2017, EPS estimate 0.477

Morgan Stanley (MS) – Q1/2017, EPS estimate 0.889

Associated British Foods (ABF) – S1/2017, EPS estimate 0.586

Thursday, 20 April

Bank of New York Mellon Corp (BK) – Q1/2017, EPS estimate 0.799

Verizon Communications (VZ) – Q1/2017, EPS estimate 0.979

Visa (V) – Q2/2017, EPS estimate 0.786

Unilever (ULVR) – Q1/2017


Friday, 21 April

American Airlines Group (AIVN) – Q1/2017, EPS estimate 0.476

General Electric (GE) – Q1/2017, EPS estimate 0.170

Schlumberger (SLB) – Q1/2017, EPS estimate 0.263

or LOGIN as existing customer

Any information, analysis, opinion, commentary or research-based material on this page is for information purposes only and is not, in any circumstances, intended to be an offer of, or solicitation for, a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any person acting on it does so entirely at their own risk and ETX Capital accepts no responsibility for any adverse trading decisions. You should seek independent advice if you do not understand the associated risks.