FX.co ★ European Shares Retreat As Macron Calls Snap Elections After Defeat In EU Vote

European stocks experienced declines on Monday, with French equities particularly hit hard following President Emmanuel Macron's call for snap legislative elections later in June. Macron’s decision followed the European Union elections, which indicated a general shift towards right-wing and far-right parties.

Attention also turned to the Federal Reserve's upcoming policy announcement on Wednesday, where an update to the rates forecast is expected though no changes in policy rates are anticipated.

The pan-European STOXX 600 index fell by 0.7% to 520.03, after a 0.2% decline on Friday. Germany's DAX dropped 0.8%, France’s CAC 40 plunged 1.9%, and the U.K.'s FTSE 100 was down by 0.4%.

French banks bore the brunt of the losses, with BNP Paribas, Credit Agricole, and Societe Generale each falling between 4% and 6%.

Airbus SE saw a decline of 1.1%. The aerospace giant announced that its Airbus Defence and Space unit secured a contract from Al Yah Satellite Communications Co. PJSC (Yahsat), the UAE's leading satellite solutions provider, for its new geostationary telecommunications satellites, Al Yah 4 and Al Yah 5.

In the U.K., Pennon Group shares dropped by 1% following the appointment of David Sproul as chair designate, succeeding Gill Rider after the annual general meeting on July 24.

In contrast, Tristel shares rose by 1.4%. The infection prevention product manufacturer disclosed that it has appointed Matthew Sassone as Chief Executive Officer, effective September 2.

On the economic front, the U.K. saw a decline in permanent staff appointments for the twentieth consecutive month in May, though the rate of decrease was the slowest since March 2023, according to a report by S&P Global. Recruitment consultants attributed the drop in hiring activity to delayed decision-making and reduced demand among companies, as highlighted by the KPMG/REC Report on Jobs. Temporary billings also decreased in May, albeit at the weakest rate since January.