While you were asleep: Macron defeats Le Pen in French presidential election while KZN flood damage reaches R17 billion

We begin this morning with the French presidential elections, where the incumbent president Emmanuel Macron has won re-election by defeating his right-wing challenger Marine Le Pen in a re-match of their 2017 contest.

Macron’s campaign focused on making France a cornerstone of the European Union as he seeks to bolster the bloc over the nativism and protectionism championed by Le Pen. The incumbent’s victory this time around is by a smaller margin than in 2017 when he beat Le Pen by more than 30 points.

Macron is the first French president to win re-election since Jacques Chirac two decades ago.

His win has brought some relief to the world markets with investors predicting a Le Pen victory would have brought a shockwave to the markets on the scale of the UK’s vote to leave the EU or the election of Donald Trump as US president.

World leaders have begun sending their congratulations to Macron, with Ukrainian President Volodymyr Zelensky calling him a “true friend of Ukraine” and thanking him for his continued support in the country’s fight against the Russian invasion. Macron and Zelensky have spoken multiple times since Russia began its invasion of Ukraine.

On the Ukraine front, the UN says almost 5.2 million Ukrainians have fled the country since the war broke out nearly two months ago. Women and children account for around 90 per cent of those that have fled the region with men between the ages of 18-and 60 eligible for military service unable to leave.

Meanwhile, the US has sent its top-ranking officials to visit Ukraine and has pledged a further $713 million in military aid for Ukraine in its fight against Russia. Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin met with Zelensky on Sunday where they pledge their support both militarily and diplomatically while concerns around their safety persisted.

On the local front, the scale of the damage caused by flooding in KwaZulu-Natal has reached an estimated R17 billion with some R857 million needed for water pipe repairs and some R940 million in estimated damage to Prasa related infrastructure adding to the long list of woes now plaguing the KZN province.

KZN Premier Sihle Zikalala said in a briefing on Sunday that the death toll currently sits at 435 people with 54 people still missing and more than 7,000 who remain in shelters following the flooding.

Zikalala called the floods “the greatest disaster in the life of our country.”

In the markets, the rand is still on the back foot this morning and is currently trading at R15.68 to the US dollar after it closed last week over R1.00 down to the greenback. “The rand has been hit hard over the past week, with other EM’s not really following a similar pattern,” comments TreasuryONE.

“We see the rand has now fully reversed all the gains we had since the beginning of March and trades in line with the AUD, which also has a strong commodity footprint. This could highlight the fact that the market has rotated back into other assets leaving the rand a bit exposed.”

Another reason could be the strict Covid-19 lockdowns in China with commodity prices giving back ground as demand from China could wane and supply chain issues are not letting up.

“Gold is currently down 0.6% this morning as the rise in US treasury yields is seeing investors exiting their long gold positions,” says TreasuryONE.

Gold is currently trading at $1,920, platinum at $925, and palladium is 2.7% down at $2,306 while the restrictions in China have impacted the oil price with Brent crude currently trading at $103 a barrel.