The market chose to fret about French elections this week, because a string of recent elections have led to unexpected outcomes, even though US exposure to the French economy is quite small. Earnings season helped risk-on sectors gain this week, and risk-off groups waned. However, trader anxiety, doused early in the week, flared up again after the terrorist incident on Champs Elysees. As a famous French historical figure might have tweeted today, "Let them eat risk-off cookies!" (Yes that rhymes with Biscoff cookies. More on that later.)
Chart 1: The market was put on a diet of French risk-off cookies this week, in anticipation of the first round of French Presidential Elections on Sunday, 23rd April. The ones in the picture are from Ikea.