Morning Commentary: Macron’s win in France does little to help markets; oil prices on the radar

By Colin Hanner

Chicago, May 8 – In what could have been a catastrophic turn for emerging markets on Monday, the results of the French election followed what polls had clearly shown running up to the final vote, with Emmanuel Macron winning resolutely over Marine Le Pen on Sunday.

Yet, with markets relying on those polls ahead of the election, not much had changed on Monday morning.

“With markets having already priced in much of a win and challenges still ahead” – a series of legislative elections in June – “actual gains have however been limited,” a market source said.

“It will be a relatively calm week, [versus] the previous one, despite what looks like a busy calendar,” the source said.

The volatility of crude oil prices has attacked markets on many fronts last week and will be one of the central tenets of the week ahead, market sources said.

“Concerns remain on the higher production from shale notably in the U.S., and the announcement” on Monday from Saudi Arabia’s Energy Minister calling for cuts into the second half of the year, which “failed to lift oil prices this morning further,” a market source said.

Some Middle Eastern sovereign bonds were higher on the morning.

In Bahrain, its 7% notes due 2028 were higher by 8 basis points on Monday at 103.70 bid, 104 offered.

Kuwait’s 2¾% notes due 2022 were up 6 bps to 100.81 bid, 101.06 offered, while its 3½% notes due 2027 were up 7 bps to 101.87 bid, 101.99 offered.

Mubadala trading

Abu Dhabi’s Mubadala Development Co. PJSC, which priced a dual-tranche issue early last month, was trading on Monday.

Those two issues were hovering around par on Monday. Its 3% notes due 2024 were quoted a 98.87 bid, 99.12 offered from its initial pricing of 99 5/8.

And its 3¾% notes due 2029 were quoted at 100.15 bid, 100.30 offered compared to its initial pricing of 99.981.

© 2015 Prospect News.
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