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It seems as if global equity markets smacked into a wall of worry yesterday, as traders and investors came to grips with the real possibility that the Federal Reserve will hike rates at their meeting on March 15. Of course, the Fed has goaded market participants into only looking to the four press conference meetings per year, the ones accompanied by a new summary of economic projections, so tension would be high regardless.

Yet after a week in which Fed speaker after speak, voter and non-voting member alike came out in favor of raising rates up to three times this year, a turn higher in short-term US yields has boosted the US Dollar (via DXY Index) to its highest levels since January 11.

While DXY is taking a step back, it does not appear to be a USD-centric move: AUD/USD and GBP/USD were negative on the day, at the time of this writing; and USD/CAD and USD/JPY were still positive. Traders still have the February US ISM Services index to look forward to at 10 EST/15 GMT; and Fed Chair Janet Yellen is speaking at 13 EST/18 GMT, in what could be the metaphorical ‘icing on the cake’ for a March rate hike (but not the ‘cherry on top’ – that would be the Nonfarm Payrolls report due next Friday).

Instead, one needs to look no further than the heaviest-weighted component of DXY Index, the Euro (57.6% of total), for answers. Signs that Francois Fillon’s campaign is falling apart increase the odds of Emmanuel Marcon advances to the second round in French elections, boosting the Euro. Today, the collapse took the form of one of Fillon’s top aides quitting, a sign that the center-right candidate’s campaign is in a death spiral. Yet this is a welcomed sign as it is another indication that the field is being cleared for Marcon.

The simple fact is, while anti-EU candidate Marine Le Pen appears poised to win the first round of the French elections in April, polling shows that once the field is winnowed down to just two candidates – Marcon and Le Pen – it is the establishment candidate, Marcon, who appears poised for a decisive victory: this week, Marcon has polled ahead of Le Pen around 58-42 or 60-40. Now that French-German yield spreads are narrowing, markets are offering a sigh of relief and giving the Euro a lift.