French Election Monitor 3: Markets hold their breath as first election round draws near

As election day for the first round of France ' s presidential election approaches on Sunday, the result remains unpredictable , with the four leading candidates Marine Le Pen, Emmanuel Macron, François Fillon and Jean-Luc Mélenchon head to head in the polls. Ar ound 30% of voters are still undecided, as outlined in French Election Monitor #2, , 18 April. The market reaction afterwards will depend largely on the candidate combination in the second round and we see three broad risk scenarios, depending on the chances of an EU sceptic proceeding to the second round and subsequently winning the presidency (see below). While a run-off between Fillon and Macron would be the lowest risk scenario , with no EU sceptic reachi ng the second round, we see a face-off between the two EU sceptics Le Pen and Mélenchon as the highest risk scenario, with the biggest adverse market reaction . A ‘surprise' scenario w here we see, for example, Le Pen significantly outperforming the polls, gaining some 30-49% of the vote in the first round, should also be considered a high-risk scenario, as, in this case, the predictive power of second round polls would also be highly questionable, even if her contender is Macr on.

Voting stations will open at 08:00 CEST on Sunday and close at 19:00 in small towns and 20:00 in big cities. Voting in the French overseas constituencies will take place on Saturday, to ensure that voting takes place before any preliminary results are published. Exit polls by the main TV and radio channels are due to be published at 20:00 on Sunday and have been relatively accurate in the past . Keep an eye out for voter turnout estimations released during the day. Lower participation, as suggested by the polls, would be likely to boost Le Pen's chances of winning, as her supporters remain the most certain of their choice.

Official election results will be released by the Ministry of the Interior over the course of the night and updated continu ally as new results come in district by district. Due to France's overseas territories, the final result will probably be released on Monday around midday. However, unless the race is very tight, the votes from the overseas territories should not move the result much and we should have a good indication of the outcome around midnight or in the early hours of Monday morning.

Download The Full French Election

Share: Analysis feed

This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.