The markets refuse to believe in an election of Marine Le Pen

Posted Apr 22, 2022, 6:50 AMUpdated on Apr 22, 2022 at 8:32 am

On the financial markets, the case seems heard: Emmanuel Macron will emerge victorious, this Sunday, from the second round of the presidential election. Polls now credit the outgoing president with 56% of voting intentions. The political risk premium associated with a possible victory for Marine Le Pen has steadily declined over the past two weeks. Thursday, the day after the debate between the two rounds, it had almost disappeared.

A dangerous complacency? Market professionals, who have painful memories of Donald Trump’s election and the Brexit vote, warn. Because the risk for investors is asymmetrical. If Emmanuel Macron wins, his victory will bring only very relative relief in the markets. If, on the other hand, the massive postponement of the anti-system votes benefits Marine Le Pen, the reactions could be extremely violent, both on European rates, the equity markets and the euro.

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