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Attention: French presidential election
2019-11-11 • Updated
The decisive second round of French presidential election will take place on Sunday, May 7. Two candidates will compete for France’s top position. Far-right leader Marine Le Pen, who aims to fight immigration and leave the euro area. Centrist candidate Emmanuel Macron, on the other hand, wants to strengthen the European monetary union by setting up a separate budget for the 19 countries that use the euro.
Financial markets have already priced in high probability of Macron’s victory. According to the recent opinion polls, young centrist can win 65% of votes in run-off against Le Pen. The main task for Macron in the countdown to the second-round vote is to pull in the left-leaning electorate of Hamon and Mélenchon as well as those who voted for center-right Fillon in the first round.
How to trade?
While preparing for trading on the outcome of the French presidential election, remember that just because a candidate won the first round, it doesn’t mean that he/she will win the presidency. There are concerns that French voters may stay at home. The turnout is the biggest challenge for Macron’s team. Le Pen’s supporters may prove to be more devoted to their candidate and eager to come to the voting stations. Macron’s voters, on the contrary, are pretty sure in an absolute win of their candidate, so there’s a risk that they won’t go to cast their votes this Sunday. As a result, there is a room for uncertainty. Beware of unexpected outcomes!
Whatever be the result of the second round, remember one thing: the EUR and high-risk assets will like Macron’s victory, while Le Pen’s success might seriously hurt the single currency and boost safe-havens.
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