In a largely anticipated result, Emmanuel Macron has won the French presidential election. The contest has been one of the most closely watched political and market-relevant events in Europe, and the most hotly contested French election in recent history. But with a winning margin of 66% vs Marine Le Pen’s 34%, Macron’s victory is decisive. Turnout was low by French standards at 74%.
With the final round of the French elections just days away, the political moment that people have been talking about since President Trump’s election has arrived. While the polls point to an overwhelming win for Macron, I take a quick look at the ways in which this election could still turn, and also the reasons why this time could be different to Brexit and Trump.
Markets toasted France on Sunday night (April 23) as Macron made the second round to challenge Marine Le Pen. It broke a sequence of shock election results in G7 countries and for once meant our Asset Allocation team got a full night’s sleep (see Sunday Bleus which we updated live on Sunday night).
In my recent post The future ain’t what it used to be, I talked about the importance of looking ahead for scenarios that could affect our portfolios, and assessing what impact they might have. 2017 is littered with potential event risks; here we look at the 'unlucky 13', with European politics taking centre stage.
The French people go to the polls for two rounds of voting in the spring. Markets have belatedly noticed that there is a significant risk associated with this event. In particular, they fear the French people being caught "entre le marteau et l'enclume" (between the hammer and anvil) in the second round of voting in early May.
It has been a very popular narrative in the run-up to the referendum to suggest that the euro zone economy is failing a generation of job-seekers. However, it would appear that this 'conventional wisdom' doesn't stand up to a close inspection of the facts.