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People and MarketsCommentLeader

Straight out of left field


Expecting the unexpected has been market philosophy since the Brexit vote last June. Adherents may well have thought that made Marine Le Pen a certainty to win this year’s French presidential election.

Well, the phrase is right — but the prediction wrong. Le Pen might not now even make it past the first round, despite being a certainty all year to get through.

We also have the nuclear option of Le Pen making it into the run-off against the new dark horse — far-left candidate Jean-Luc Mélenchon.

A win for either would be bad for markets in the eurozone.

Regardless, issuers will be desperate to avoid any volatility around the first round of the election, rather than the run-off they had been fretting about all year.

But opportunities also lie ahead. If the unthinkable is avoided and one of the centrist candidates makes it through against either hard left or right candidate, the falling support for Le Pen and the fact that Mélenchon is polling fourth among the top contenders makes it far more likely that a centrist will prevail at the second vote on May 7 than just a few weeks ago.

There is of course a big hurdle to be passed when French voters place their first vote on April 23 — but with the focus shifted two weeks earlier, some of the relief rally that would follow a centrist win could come sooner than expected.