Apart from positive economic data, fears over election outcomes in core European countries have also dissipated.

In the Netherlands and France, voters said no to a populist government. On the calendar, there are still elections to take place in Germany and Italy, but the populist threat has fallen by the wayside.

In the specific case of France, voters chose a pro-European and independent candidate, Emmanuel Macron, who is also currently set to win parliamentary elections, giving further reassurances that he will have the necessary political support to push through with his agenda, including reforms on the labour market and deeper euro zone integration.

“Indeed the resounding presidential and likely parliamentary elections over the weekend in France; the poor showing of Five Star in Italy’s municipal election also over the weekend and most likely 4th term for Merkel in September – will likely re- invigorate the Merkel-Macron or Franco-German engine that is at the centre of the euro zone project and its direction and political events will give this euro zone engine a new force and rudder – something that investors would be most focused; and likely to carry more positives developments in the next 1-3 years in terms of euro zone integration and EU consolidation, even in parallel with Brexit,” Randolph from IHS Markit added.

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