French election fears upset markets once again

Political uncertainty ahead of European elections gave nervous investors a reason to sell the euro and kept French government debt under pressure, while the price of safe-haven gold hit three-month highs.

Wall St stocks opened lower, weighed by losses in the banking and healthcare sectors, and European share prices turned negative, while oil recovered after a surprise draw in petrol stockpiles.

Three months before the final round of France’s presidential election, investors are concerned about the strong showing of far-right candidate Marine Le Pen, who has promised to take France out of the eurozone and to hold a referendum on EU membership. Eurozone government bond yields fell broadly yesterday, though French debt lagged the rest with 10-year yields falling three basis points to 1.1% but remain not far off the 17-month highs touched earlier this week.