With less than two weeks to go, the race for the presidential election’s first round has tightened putting up to four candidates within reach of the second round. Despite the narrowing polls we see a 60% chance that Macron wins the presidency in the final round on 7 May, followed by Fillon with 30%. The chances of any of the radical left or right wing candidates of winning are no more than 10%. The implied chance of a Frexit is even lower.
However, France is likely to go through more political volatility and fiscal consolidation looks a long way off at this point, which we expect to weigh on French yields as non-residents reconsider their allocations to French assets and the ECB ponders the end of its QE purchases.
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Our Associates are closely monitoring developments so we can keep you updated on the French Presidential and National Assembly elections and their potential implications for financial markets. Contact us to schedule a call with our experts for more detailed views.