Centrist Emmanuel Macron and far-right leader Marine Le Pen are set to face each other in a May 7 runoff for the French presidency after coming first and second in Sunday's first round of voting, according to multiple projections.
Flows likely to be brisk at the open on these headlines today with dealers suggesting strong demand for EUR/USD.
Europe's political fog may finally start to lift in the coming week, with the French presidential election and the European Union's summit on Brexit strategy putting the bloc on a new path after months of uncertainty. With growth on its best run in years and sentiment indicators pointing to buoyant consumption, clarity in an election-heavy year could help Europe move past a decade of economic pain. Indeed, cautious optimism from normally reserved central bankers suggests Europe could be nearing a turn towards normalization after years of economic firefighting and improvisation.
However, with round 1 of the election out of the way, other factors are likely to garner the markets attention in the week ahead.
North Korea said on Sunday it was ready to sink a U.S. aircraft carrier to demonstrate its military might, as two Japanese navy ships joined a U.S. carrier group for exercises in the western Pacific.
U.S. President Donald Trump ordered the USS Carl Vinson carrier strike group to sail to waters off the Korean peninsula in response to rising tension over the North's nuclear and missile tests, and its threats to attack the United States and its Asian allies.
The United States has not specified where the carrier strike group is as it approaches the area. U.S. Vice President Mike Pence said on Saturday it would arrive "within days" but gave no other details.
On the earnngs front:
Corporate America is set to unleash its biggest profit-reporting fest in at least a decade this week, with more than 190 members of the S&P 500 index delivering quarterly scorecards.
The lineup accounts for around 40 percent of the benchmark index's value, or more than $7.7 trillion, and includes big names like Google's parent Alphabet Inc GOOG, Amazon.com Inc AMZN, Microsoft Corp MSFT and Exxon Mobil Corp XOM.
The reason for the slew of reports next week is anyone's guess, although recent holidays possibly played a role. Passover, Good Friday and Easter all fell in the previous weeks, which may have prompted some companies that typically report earlier to delay. Just 76 companies reported this week compared with 134 in the comparable week a year ago.
Central bank meetings in Japan (Tuesday) and Europe (Wednesday) aren't expected to yield much in the way of new info, but there are rumors that the BOJ could discuss the tapering of QQE activity. We'll see...
US Building Permits due on Wednesday.
Durable Goods, US Trade, Pending Home Sales, and Initial Jobless Claims all due on Thursday.
Q1 Advanced GDP will be closely watched as will the Chicago PMI data on Friday.
As always we will be covering each of these releases as the week evolves.