Bonds Rise as Stocks Languish Before French Vote

• Bonds Rise as Stocks Languish Before French Vote

France led gains in the region’s government bonds before the nation goes to the first round of voting that puts the future of the common currency at play. Stock volatility scaled its highest level in nine months while European equities erased gains.

The euro showed little signs of anxiety days before voters narrow the field of front-runners, including the National Front’s Marine Le Pen, down to two. Anti-euro Le Pen has fallen behind centrist Emmanuel Macron in recent polls. The Bloomberg Dollar Spot Index fell for a second week after President Donald Trump said this month the currency is getting too strong. Rebounding commodities propelled gains in European mining stocks while oil rose.

Earnings continued to paint a mixed picture on the health of the economy, while investors kept an eye on a series of elections in Europe. The murder of a policeman on the Champs-Elysees forced an early end to campaigning ahead of Sunday’s vote in France. Investors are bracing for a period of uncertainty until a victor emerges on May 7.

“The need to hedge the downside risks on the euro without capping the upside potential, has mostly pushed investors toward the currency options through the week,” Ipek Ozkardeskaya, a market analyst at London Capital Group Ltd., wrote in a note. Heightened stock volatility has been spurred by investors’ need to protect against political risk into and following the first round, she said.