France: Markets concerned by political developments - TDS

Analysts at TDS notes that after Italy, markets are also concerned by developments in France, especially the rise of the right-wing National Front (FN) ahead of elections in April-May 2017.

Key Quotes

“We were of the view that while FN may be polling well, the nature of the French electoral system makes it unlikely that party will assume control. However, with the success of global anti-establishment parties and candidates in 2016, the markets will now attach a higher risk to the possibility that FN gains a lot more support.”

“FN’s Marine LePen success in the second round appears remote. While the betting markets suggest the odds of becoming President are in the single digits, markets will naturally be skeptical of polling given drastic underperformance in predicting actual events.”