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.
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.
|Ifop-Fiducial||18–21 Apr 2017||60.50%||39.50%|
|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.