Expectations. And this comes after we saw in march, the highest levels both components of the epoe index in ten years. Doesnt sound like a lot of uncertainty when it comes to businesses ahead of elections. Despite the french elections there wasnt a lot of uncertainty when it came to businesses either. It is getting stronger month by month, with the ifo data the last time around it was interesting to look at the expectations. 105. 2 for the expectations. But a forecast of 106. Thats slightly below maybe it seems like expectations are coming off a little bit. It could be interesting to see what german businesses are actually worried about it. Well be speaking with clemens fue tch fuest, the president of economics, that interview in ten minutes time. Take a look at the markets were still keller. Look at the cac first of all, after the first round of elections. The cac 40 up by 4 so hanging on with strong gains with Emmanuel Macron winning the first round followed by Marine Le Pen. Both of those candidates are going to be in the president ial runoff in the 7th of may, of course. Thats really what were seeing this morning. And the banks seeing a big old rally in european banks. With the ecb, it remains to be seen what theyre thinking with the expectation on thursday as well. To finalize for the rest of the year whether or not theyre looking at tapering if the gains are holding on to what weve seen thus far. And indeed, also some of the bonds and some of the moves that weve seen, a narrowing especially in the frenchgerman bond deal that gap narrowing. I think its in close to 40. Those are the levels we lost in december. On friday, were at 70 basis points. Thats how much narrowing weve seen in one trading day. Polls indicate that Emmanuel Macron is going into the second round of the president ial election with i comfortable majority ahead of his rival Marine Le Pen. A fairly short night. One of the big surprises coming out yesterday, this time the polls were actually right . Reporter well, in those polls back in 2002 after a shocked turnaround National Election made it through to the second round. This time, it was a little cautious because of the margin between the candidates. To me, it was the establishment versus the antiestablishment parties. Macron making it to the second round and Marine Le Pen as well. The socialist and republicans through their support behind that urging their voters to vote for macron to be president and stop the front nationalists to march to the palace. To me that was extraordinary. Yes. Basically, that and the traditional partners as we know them, theyve been leading the Political Landscape for years. Two outsiders, going back and picking up on the pollsters, i think some of them french pollsters might be hired and think about the digital component which some of the reform that took place after 2002. I think from this point on, weve got two weeks now left until the second round. Which has attached complacency. Now, if you look at expectations, macron is looking at 60 versus 40 . Could there be a surprise now that impacts the pollsters. There was a surprise, remember, we expected about 28 to 30 . And it came out at 20 . So, in the average of what weve seen during the president ial elections. But its going to be important to watch out at the extension levels. A lot of voters probably feel this morning that none of the two candidates is their candidate. For example, the melenchon voters, who are they going to vote for. The extreme opposite from melenchon, they might be tempted by Marine Le Pen because she has christened them just like their candidate. They are also concerned about immigration. And what she said last night is going to macron, so the intention, also the uncertainty as to what are the voters going to do. The ones that didnt vote for Marine Le Pen. And also some of the policies particularly with macron taking some policies from the socialists to form the conservatives. I think if you look at me melenchon, there are tendencies from shift from the left to the far right. The focus has been hugely around personality. Whats going to be key the debate how macron fares against le pen. When hes attacked, he can get real aggressive. And thats going to be his best really. And weve seen glimpses of that in the previous debates when he had the opportunity to respond to Marine Le Pen. But its going to be very interesting to have been comforted for two or three hours between the two of them because its never happened. And i think well have such a division. And its going to be very interesting to see an confronted facetoface. We just want to bring up a map quickly as well. It shows you a breakdown between the support with macron and what le pen has. You see less than 5 , but if you look at the pink, phenomenal turnout, about 40 . What do you make of that divide . When you look at the map, you really have a divided front between the east and the north. Those who voted for Marine Le Pen. The south of france. And then the bulk of the support from the west and big metropolitan big cities like paris and bigger cities marseille. So, you have a very clear divide between the rural areas and the bigger cities that voted in favor of macron, definitely. Just to follow up on that note, with divisive politics when they come to france, whether any candidate can heal that rift. Carolyn and louisa. Back to you. Lets talk about what that means for your money. What does it mean for investments right now . Do we buy into this risk on rally that were seeing right now . How sustainable is it . Its a collective sigh of relief, i think. I think the key, sustained trend which we see in europe people equities, i think it gives a big boost to european equities. There has been a valuation gap. That is likely to close. And there are problems on the u. S. End as well. Because the quality in the u. S. Is deteriorating and problems on the legislative agenda. Both sides. The trend was in place before the election result was out. We have a lot of people coming on the show and talking about how they want to go over it in europe and pare back it a little. I think i would agree with it. One of the key reasons why, people were cautious jumping into that trend which has been very clear for months now. And then the polls given what happened with President Trump. I think that trend can run on for the next few months. If macron wins, he might not, but everything is gearing up to him winning as of now. But he still needs to push through reform. It seems he has an unique backing to push through reforms. Could we be favoring a level of uncertainty still . Sure. The next big election in june. The margin will be much narrow. I think we should not forget this election was more about the future of eu, rather than sharpened reform in france. The probability that le pen does not come into power. Do you think we may be overestimating support for the eu at this stage . Actually, i would like to have a word of caution there, in the sense that, yes, i think we have dodged a hurricane most probably in france. But i think of course, the focus in italy very soon, the elections there. And the Banking Sector issues are not involved there. So, the design failure is still with us. Hopefully, these candidates will take the opportunity to improve the situation. Youre staying with us. Hang on, by all means get involved. Send in tweets if you want to be part of the discussion, louisabojesen cnbc. And now were going to talk a little more about germany, because the ifo business index, the ifo climate rose in april, roughly from 112. 5. Clemens fuest is here with us. Blat glad to have you with us. Expectations are a little softer than expected . Thats correct, but we should bear in mind that expectations are about further improvements. So, given that the situation is so good, i wouldnt overrate the decline in expectations. It mostly comes from the automobile industry. But as i said, i wouldnt overrate it because the assessment of the situation is so good that its, you know, less likely, or natural that you dont expect it to improve very much further. What do you see with regards to the general strength of the German Economy at the moment . I think we have a solid upswing in the germany economy. And it is broadening. A year ago, it was mostly driven by domestic demand. And now its broader, you know, industry is part of what industry is part of it. So the German Economy is strong at the moment. Clemens, it seems like in the face of brexit, germany is in need of a very Strong Partner in europe. Historically, thats been france. I guess its been very difficult to overstate the importance for the future of the eurozone. What do you think . This victory is very important. Its very likely that he wins the second round, so this cannot be overestimated indeed. There was a disaster looming which with melenchon and le pen entering the finals. They were just a few Percentage Points apart. So from the german end, i suppose from the europe people perspective, this is a very good result. Economically, hes quite the lib balanc liberal. He wants to make france competitive again. France has been considered the sick man of europe. But its still apeoplime anemic. Do you think macron is the right candidate to turn things around for france . I think his platform, what he wants to do is right in many ways. The question is, will he have the backing . Will he have the backing of parliament . So hes unlikely to win the majority in the parliamentary elections. So what hes going to do about that remains to be seen. So there there be some type of he will need to cooperate with other parties. And theres the broader issue of whether he really has the mandate for strong reforms to these elections. He has announced the plan to reduce Government Spending but really didnt run on that. So the question is will the population accept the reforms. Will the trade union which are very strong in france support the reform. That is the open question. On the other hand, a moderate candidate might find it easier in the end, and a slightly less wing candidate might find it easier than someone who runs on a tough agenda. So i think macron is probably best placed to do something about economic reforms. Clemens, were not done with elections, though. We still have the second round, the 7th of may in france. Weve got the italian elections coming up. Weve got Political Uncertainty in the states. Weve got brexit in the uk. How much is business affected by Political Uncertainty . My perspective is business is not affected by Political Uncertainty as far as the short term is concerned. We ask for expectations for the next six months. Risks are rather limited. If we think about the next two or three years i think there are considerable risks for the German Economy and europe mean economy. As you said, the italian situation which is very difficult. And brexit, it seems at the moment that negotiations are not very cooperative. Both sides seem to harden their positions. Sand the major problem, if there was a hard brexit without an agreement on future free trade. So, i can see risks looming for the German Economy and the economy two or three years ahead. Clemens, thank you very much for your time this morning. The Ifo Institute president. By all means get involved. Email the show, street signs 80 cn signs cnbc. Or tweet us directly, louisabojesen. Or carolyn. What are you wearing . I have on heels. The luxury shoemaker is putting itself up for shoes, jimmy choo. Can they find a buyer that makes a good fit . Well pose that question after a short break. Finding time to get things done isnt easy. But weve got the Digital Tools to help. Now with xfinitys my account, you can figure things out easily, so you wont even have to call us. Change your wifi password to something you can actually remember, instantly. Add that premium channel, and watch the show everyones talking about, tonight. And the bill you need to pay . Do it in seconds. Because we should fit into your life, not the other way around. Go to xfinity. Com myaccount welcome back to the show. Uk Energy Provider centrica and sse are at the bottom. Announcing over the weekend, according to the sunday times could cost costs by 100 pounds a year. Jimmy choo has announced its considering a formal sale process as part of a Strategic Review to maximize shareholder volume. The luxury retailer confirmed it discussed its decision with the majority share shoulder jab luxury. The british fund said it has not yet receive nidz offd any offer. Originally, it was chow, chow, and it was roriginally misspelled. Any buyer could come in with a low ball bid i dont know if you can walk away how much is the company potentially volumed at . I believe 700 million. 700 million. Meantime, First Quarter earnings phillips rose 2 coming in at 5. 7 billion euros. It comes from the company well positioned for the year ahead. The year is still low. We believe that a 4 to 6 gross guidance is wide enough. We aim for 100 basis points Profit Improvement for this year. We started the year in the portfolio with 80. So, we are well positioned for the year. And thats it. Now, it was a very active quarter. We launched several Breakthrough Innovations that are very exciting. For example, our platform for minimally invasive surgery. It was very well received by cardiologists all over the world. Also, hospitals are keenly looking outside for our intelli space outcomes. From Innovation Point of view we have a lot cooking. And other news, the ceo will resign in july, not responsible are in any wrongdoing to the cement makers activities in syria. Lafargeholcim management said they were aware that violations did take place. We took the accusations very seriously. We did an independent study. We got the preliminary findings from the independent study. And what you see is us taking the next actions to address the findings from the study. This is good corporate governance. Excellent corporate governance. And well take all of the necessary measures to address the situation. Quite a bit of Corporate News this morning. Of course, we have a pretty big week with us. Chief strategist with us. Weve got details supposedly on trumps tax package coming out on wednesday. How skeptical should we be . Or is this continued rally into the details . I think we should be kept sk skeptical about a tax reform plan going through. Theres been massive valuation coming from the Trump Administration. I think its indicated that strengthening with a moderate Corporate Tax cut is something that we should hope for in the next few months. Which sectors in particular should we be looking at around this . For now, weve come up a little bit from the european equities in april. We had that big rally into march, then we come back a bit. I think from a u. S. Equity perspective, i think this is the key factor for u. S. Equities. Although i should say that the tax seems off to be off the table. That would have a lot of implications. I think for u. S. Expectations, and on the other side, european equities are looking at these reductions and uncertainty. When we take a look at the pe rates, or the price part was extremely high. Or came in more or less high for expectations. At the same time, we know if the tax cuts dont come through as expected, we know that ratio will have to come down quite a lot further. How much, do you think . I think the expectations, as you mentioned, expansion happened on the price part bit on corporate returns this year. I think the earning are okay. Earning can grow but the thing is the multiple expansion weve had in the u. S. Is not justified anymore if the Corporate Tax reform doesnt come through. And more implications for further gains in u. S. Equities not necessarily a big correction. I think the trend that weve seen in the last few months. If youre long in the market, youre having a really good day. What should you do, how should you position your portfolio right now . I think the key one area, i think companies do well and less in tune with whats happening in the u. S. And more in the world, is the emerging markets. I think it affects the rally. I think thats something more of a structured play. Or the Corporate Tax reform, for example in the u. S. Thank you so much. Chief strattist at lombard. We need to take a little break at usual this day. Check out our blog live. You can find us at twitter. louisabojesen. The treasury secretary sending markets higher yesterday with sweeping tax reform being implemented before the end of the year. Taking actions which remove the changes that were made to change the structure of the Financial System is very dangerous. Hello and welcome, youre still watching street signs. Im carolin roth. And hi, everybody, im louisa bojesen. Here are your headlines today. French Election Results sparking a rally across europe, sending bank shares higher as macron goes through with a Comfortable Lead over Marine Le Pen. The cac in paris as the yield shrinks in the victory as a sigh of relief. The guidance with a jump in income in the First Quarter the ceo telling cnbc the company is well positioned for the year ahead. Year is still long. We believe that a 4 to 6 gross guidance is wide enough. We aim for 100 basis points Profit Improvement for this year. We start the year in the portfolio with 80. And jimmy choo putting his best foot forward. Rallying in london as the shoemaker is looking for a buyer that fits. Good morning, everyone. What were