Although Mr. Hollande victory yesterday didn’t come to many as much of a surprise, especially after having lead the polls with a sizeable lead for several months and being indorsed by all of the parties leaning to the left after the first round of presidential elections, stock markets are still struggling this morning to come to terms with the fact that the alliance Merkel-Sarkozy has been terminated.

The main problem stock markets across Europe are facing this morning is not that Mr. Hollande has become the new French president but rather the uncertainty his election is bringing with him. While many are convinced that President Holland will be fairly limited in regards to what he can do when it comes to turning back austerity measures already agreed on within the Euro-zone, many are worried that the Euro-zone will be less united in the future and therefore not be able to combat the financial crisis and any future crisis in such a quick and decisive manner as before.

For the next few days and weeks the direction of the stock market will very much hinge on how much efforts all sides, mainly Chancellor Merkel and President Hollande will be putting into trying to work together and to find common ground.

Markus Huber - Head of German HNW Trading - ETX Capital
www.etxcapital.com