Daily Brief – French Presidential election

French Presidential election

It may be 8 months away but pulses are beginning to race as France contemplates, well France, beyond Emmanuel Macron. The leader of the left-wing party La France Insoumise (LFI) who embraces a heady cocktail of left-wing populism, radical socialism, eco-socialism and democratic republicanism is riding high in the polls but as ever in the murky world of politics, the lead time until the election and the chicanery resulting from the number of politicians from the French left including Francois Hollande with presidential pretensions all jockeying for advantage make any predictions pretty much valueless. It is worth remembering that France elects its President in a two-round contest with the two leading contestants from the first round going head-to-head in the second with the winner of that round proceeding immediately to the Elysee Palace.

GBP/USD 1.3634.

Mr Market

Previous and recently ousted UK PM Keir Starmer cited Margaret Thatcher as someone “ who sought to drag Britain out of its stupor by setting loose our natural entrepreneurialism” but despite that somewhat linguistically mangled endorsement, it did not stop him having her portrait removed from his 10 Downing Street study. Less unexpected devotees of Margaret Thatcher, Liz Truss and Rishi Sunak also championed Thatcherite doctrine. It is unclear whether US Treasury Secretary Scott Bessent has studied the Iron Lady’s pronouncements on market forces and the challenge of bucking the market, but even as an influential hedge fund manager, he would have on occasion been “long and wrong” or “even short and caught” and been forced to conclude that the market did not share his own directional views. Therefore, it is surprising that after his quickly dissipated market intervention in the long end of the US Treasury Bond market last week, and even after doubling his intervention that just 24 hours later, he is saying that he will intervene still more aggressively. The firepower of the US Government is of course fearsome, but Mr Market has the potential to humble even US Treasury Secretary Bessent.

EUR/USD 1.1671.

Cephalopods

Traditionally the North Sea was a rich source of prawns, plaice, and cod but in recent years according to Germany’s Thunen Institute which monitors such things, cephalopods have greatly increased in number – in other words, stocks of squid and octopus are up big time. This is due to higher sea temperatures – the North Sea averaged 15.7c in 2025. Not content with multiplying and here we are showing off our knowledge of collective nouns, the shoals of squid and the consortiums of octopus are attacking cod, sprat, herring, and whiting. In case you are out fishing in the North Sea and are unclear whether you have hooked an octopus or a squid, the clue is in the name: an octopus has 8 arms while the squid boasts 10 arms.

GBP/EUR 1.1681.

US Dollar

Following the US Treasury Secretary’s Long Bond intervention described above both last week and this, US Dollar faltered but has since steadied. So far, the retaliatory noises emanating from Canadian PM Carney have not rattled the market but those 50% US tariffs on cars, steel, and parts imports from Canada have not yet been met with an actual Canadian response. However, as much as 4 million barrels of oil per day flow from Canada to US refineries and if that were to be shut off, the USD would suffer and that would likely produce a more constructive dialogue from the US. Meanwhile tightening US sanctions on Iran and threats from the US to exclude any financial institution of any size found to infringe those sanctions from the USD payments systems would most certainly raise the stakes and tensions dramatically.

Brent Oil USD 88.46.

Rhinestone Cowboy

Who remembers Glen Campbell who this day in 1975 was at number One in the Us Country Singles Chart? My guess is that not that many readers of the SGM-FX Daily Brief, but for those who might remember it, if you don’t want this song lodged firmly in your head for many days to come, look away now.

I’ve been walkin’ these streets so long
Singin’ the same old song
I know every crack in these dirty sidewalks of Broadway
Where hustle’s the name of the game
And nice guys get washed away like the snow in the rain

There’s been a load of compromising
On the road to my horizon
But I’m gonna be where the lights are shinin’ on me

Like a rhinestone cowboy
Riding out on a horse in a star-spangled rodeo
Like a rhinestone cowboy
Getting cards and letters from people I don’t even know
And offers comin’ over the phone

Well, I really don’t mind the rain
And the smile can hide all the pain
But you’re down when you’re ridin’ the train that’s takin’ the long way
And I dream of the things I’ll do
With a subway token and a dollar tucked inside my shoe

There’ll be a load of compromisin’
On the road to my horizon
But I’m gonna be where the lights are shinin’ on me

Like a rhinestone cowboy
Riding out on a horse in a star-spangled rodeo
Rhinestone cowboy

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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