As June's Federal Open Market Committee (FOMC) meeting approaches in the US, Andrea Iannelli, Fixed Income Investment Director at Fidelity International, outlines why US duration offers welcome protection for investors.

Since Donald Trump was elected, investors have gradually been reassured on their fears on deflation, growth in emerging markets, and uncertainties on the euro area, which had dented appetite for risk between end-October 2015 and mid-February 2016. They therefore played the global reflation theme.

The second round of the French presidential elections has led to victory for Emmanuel Macron, who achieved more than 66% of votes. This result marks a clear watershed with traditional French politics over the past 50 years, as it is the first time that none of the mainstream parties have had a candidate in the second round of voting.

According to David Lafferty, Chief strategist, Natixis Global Asset Management, the French election represents a win for EU continuity and integration. As Le Pen risk passes, the next hurdle for the EU project is likely to be the Italian banks which remain mired in non-performing loans and poor capital positions with little political stability to address the problem...

The French election result confirms our view that markets until recently had overstated European political risks. Italian political risk and the country's fragile banking system could move back into focus soon, however, particularly if the likelihood of early elections in late 2017 rises.