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Daily Briefing: Moment of truth for France's Fillon

LONDON (Reuters) - French far-right leader Marine Le Pen has kicked off her presidential campaign with a speech identifying “financial globalisation and Islamist globalisation” as the forces bent on bringing the country to its knees.

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Polls show Le Pen and centrist Emmanuel Macron are now the front-runners, and the pair are increasingly directing their fire at each other rather than scandal-hit conservative Francois Fillon.

Le Pen’s National Front depicts Macron as the candidate of “international capitalism”, while he mocks those who “pretend to be talking in the name of the people, but ... are just ventriloquists”.

Fillon faces a critical week, under pressure to quit the race because of the furore over alleged fake jobs for his wife and children. He is fighting back via Facebook and has distributed 3 million leaflets demanding “Stop the Manhunt”. The next few days will show if he can ride out the storm.

Romania’s Social Democrat government has bowed to mass protests and scrapped a decree that would have decriminalised some corruption offences. End of story? It doesn’t look that way.

The protesters look bent on keeping up the pressure on Social Democrat leader Liviu Dragnea, who would have benefited from the decree, and Prime Minister Sorin Grindeanu. There are signs the justice minister is being lined up as a scapegoat, but that may not be enough to appease them.

Developments are being closely watched by Brussels and in neighbouring Bulgaria, another ex-communist nation with longstanding corruption problems, where dozens of people demonstrated at the weekend in support of the Romanian protesters.

Markets are still caught in two minds – drawn in by the sheer strength of the incoming economic numbers coupled with promise of U.S. fiscal stimulus and financial deregulation, weighed against hefty political uncertainties associated with the new Trump administration, potential trade and diplomatic rows and a packed European election calendar.

Wall St leaned toward the positives again on Friday with the S&P500 closing up 0.7 percent, geed up by Trump’s promise to roll back the post-banking crisis Dodd Frank regulations and a forecast-beating 227, 000 rise in headline U.S. payrolls last month.

Banking stocks led the way up and the Vix ‘fear index’ of equity market volatility slipped back below 11 pct. And the economic news from the rest of the world this morning appears enough to keep that gloss on things global markets in general as we head into a heavy earnings week in both Europe and the United States.

China’s latest business surveys for January showed activity continuing to expand at healthy clip while German new industrial orders surged 5.2 percent in December – their biggest December gain in eight years and more than offsetting November’s decline.

What’s more, the European electoral picture remains surprising, but not unambiguously negative.

The latest German opinion polls put the centre-left Social Democrats within just 4 points of Chancellor Merkel’s centre-right Christian Democrats ahead of elections later this year and French polls continue to see centrist Macron as favourite to win the French Presidency in April given the travails of prior centre-right frontrunner Fillon.

Shanghai stocks continue to take Friday’s Chinese interest rate rise in their stride and gained half a percent overnight, with most other Asia bourses up too. The dollar was slightly firmer, even as Treasury yields slipped back a touch. Brent crude is firm just shy of $57. European stocks are expected to open flat to firmer.

Editing by Jeremy Gaunt