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April the 24th is in the books here on Wall Street. Here's the New York Minute. We've had a very dramatic gain on stock markets around the world today driven by the results of the French election.
Now, if you take a look at this chart, which compares the betting market odds of a Le Pen victory last night in France compared to a Leave victory in the British referendum last year, you can see that they were seen as virtually identically possible. As a result, when you did get that relief of tension, you can see that the extra risk associated with France, as shown in the spread of French over German bond yields, was very sharp. You've also obviously seen a very strong rebound for European and French stocks compared to American.
In the US, the biggest impact has been on rate expectations, as you can see. The Fed is now thought to be much more likely to raise rates in June. Meanwhile, financial stocks, which benefit from higher rates, are dramatically outperforming real estate stocks, which don't.