Analysts at Nomura explained that many investors are approaching the French elections with the memory of the Brexit vote and the surprise victory of Donald Trump in the US, drawing specifically on Mr Trump’s victory.
"However, major differences make the US election a bad point of reference.The two electoral systems are different. In the US, a candidate needs to win the most Electoral College votes to win the presidency. In France, a candidate needs to win 50% of the vote to be elected President. In the context of the most recent US presidential election, this means that while Donald Trump managed to be elected in the US, he would not have been elected President in the French system, having lost the popular vote to Hillary Clinton.
With recent polls showing that Ms Le Pen will likely receive 40% of the vote in the second round, this means that she will need to make significant gains in support to make up the 10% gap needed for her to win. As we have said in the past, the margin of error for those results is 2.5-3%, making it hard to see that the gap being closed as a result of polling errors. To win the election, Marine Le Pen needs to gain genuine support. This could prove difficult since her party remains associated with extremism. As such, a recent survey on perceptions of the Front National suggested that about 58% of respondents view the FN as a threat to democracy.
To win, she needs to significantly reshape the opinion the public has of her party. The weaker support for Geert Wilders’ PVV party in the Dutch elections earlier this month is not necessarily a good point of reference either. The more nationalistic tone from Prime Minister Rutte leading to the vote, both in the way he dealt with Turkey and the need for immigrants to abide by Dutch values, likely helped to reduce the support for the PVV. We haven’t seen a similar pattern in France yet.
Apart from François Fillon who has been campaigning for a strong France within the EU and defends French views, Emmanuel Macron has been highly focused on more EU integration and openness and has not turned more nationalistic. This suggests that Ms Le Pen remains the main candidate for the nationalists."
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