French markets wake up to Le Pen election risk

By Julien Ponthus and Sudip Kar-Gupta

LONDON/PARIS – French monetary markets abruptly acknowledged on Tuesday the chance of far-right Marine Le Pen successful the French presidential elections towards incumbent Emmanuel Macron later in April, with sharp losses on Paris blue chip index and authorities bonds.

France’s CAC 40 benchmark fell 1.22% whereas the pan-European STOXX 600 index was broadly flat.

The unfold between the yield of 10-year French and German authorities bonds --- primarily the premium demanded by traders to carry French debt — surged to 54 foundation factors, ranges unseen for the reason that COVID-19 market crash of 2020.

“Markets awoke on Le Pen”, commented Jerome Legras, head of analysis at Axiom Different Investments.

Marine Le Pen, whose presidential marketing campaign has gained momentum in latest days, on Monday captured 48.5% of voter intentions in an opinion ballot of a possible runoff towards Emmanuel Macron, the best rating she has ever notched.