Elections Show Swing To The Right, Macron Calls Snap French Legislative Elections

Sunday's European parliamentary elections showed a swing to the far right. Leaders of both France and Germany saw their respective parties poll poorly. German Chancellor Olaf Scholz's SPD suffered their worst result. In France, President Macron has called a snap legislative election after his Renaissance party performed quite poorly relative to Marine Le Pen's National Rally party.

• The first round of legislative elections take place on June 30, the second round on July 7. If Macron losses the legislative election it will limit his power domestically for the remaining term of his Presidency.
• Italy PM Giorgia Meloni's right wing Brothers of Italy party performed well, strengthening her local position.
• More broadly, the center-right European People's Party (EPP) won the most number of seats, which should support Ursula von der Leyen, who seeks a second term as commission President.
• The balance of power is still likely to rest with the socialists and democrats, although Reuters notes that the EPP may still need the support from some parts of the right (see this link).
• Fresh political uncertainty has weighed EUR/USD in early Asia Pac dealings. We got to lows of 1.0765, but sit back near 1.0775 in recent dealings. We are off close to 0.30%.
• This puts us sub the May 30 low of 1.0788, which is a key short term support point.