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French election Update: Markets Poised for Moderate Gains as Macron, Le Pen In front

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French election Update: Markets Poised for Moderate Gains as Macron, Le Pen In front

Introduction

The previously most likely scenario looks to be playing out in the first round of the French presidential election, as Marine Le Pen and Emmanuelle Macron are ahead in early polls and projections. The “horror-scenario” is increasingly unlikely, as Melenchon is trailing Fillon for the third place. Although Le Pen might have a chance against Macron or Fillon, preliminary studies showed that the moderate and independent Macron and the Fillon will likely defeat the far-right and anti-EU candidate.

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Exit Poll Results (Macron, Le Pen, Fillon, Melenchon, Hamon) (source: Europe Elects)

Markets will likely open higher if the early projections prove accurate, as risk-on assets, especially in Europe, could start a relief rally on Monday. The Euro and the Great British Pound could gain against the Yen and the Dollar, while global stock markets expected to open higher, with gold probably taking a slight hit.

Poll Date Macron Le Pen
Odoxa 21-Apr 62.00% 38.00%
Ifop-Fiducial 18–21 Apr 2017 60.50% 39.50%
Odoxa 20-Apr 65.00% 35.00%
Elabe 19–20 Apr 2017 65.00% 35.00%
OpinionWay 18–20 Apr 2017 64.00% 36.00%
Harris 18–20 Apr 2017 67.00% 33.00%
Ifop-Fiducial 17–20 Apr 2017 61.00% 39.00%
Harris 18–19 Apr 2017 66.00% 34.00%

Latest Macron – Le Pen projections (source: Bloomberg)

The second round of the referendum will be held in two weeks time, and barring an unlikely strong rise in Le Pen’s popularity, financial markets shouldn’t be affected that much by it, with the latest polls suggesting a 20 percentage-point lead for Macron against Le Pen, and Fillon already endorsing Macron after seeing the preliminary results. As Le Pen has a large, but rigid voter base, it’s hard to imagine that protest voters could turn the race around in the second round.

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Feedback or Requests?

Mate Cser

Mate Cser

Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.

Comments
  • user

    AUTHOR Ershad

    Posted on 10:32 pm April 23, 2017.

    Hi Mate,

    Thanks for your article, I wanted to ask if gold was going to take a hit, what price should we be watching for?

    Kind regards
    Ershad

    • user

      AUTHOR Mate Cser

      Posted on 11:13 pm April 23, 2017.

      Hi Ershad,

      the $1262 and $1240 (less likely) levels could be in play. The long-term uptrend is safe for now, so this correction could lead to a good buying opportunity!

  • View Comments (2) ...
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