EUROSTOXX 50 futures did bounce 0.5% after last week’s drubbing, but the fallout of the snap French election kept the euro pinned at $1.0700.
It was notable that no less than five European Central Bank sources stressed to Reuters that the institution was not planning any emergency buying of French bonds, knowing the market will be pushing for exactly that.
The howls for help will only get louder should the spread of French bond yields over bunds widen to 100 basis points, which seems inevitable.
The pressure was also acute against the safe-haven Swiss franc, where the euro was just off a four-month low at 0.9528 francs.
It has now shed 4% in just three weeks and has investors wagering the Swiss National Bank (SNB) will be forced to cut rates at its meeting on Thursday. Futures imply a 74% chance of a cut to 1.25%, up from 40% a week ago.
At least there’s the football to offer a distraction.
