France: Macron’s victory to prove mild comfort for markets - Rabobank

Michael Every, Senior Asia Strategist at Rabobank, points out that the polls were right about the President Emmanuel Macron’s victory, and his 66% to 34% margin, are likely to prove mild comfort for markets today, even if the event was very much priced in.

Key Quotes

“But let’s not forget that the forces ranged against him are still formidable: an e-mail hack that we might be allowed to get a legal look at now that he is President (we weren’t allowed to do so before); his lack of a political party base; the fact that many voted for him just because he wasn’t Le Pen rather than because he was Macron (“It’s a choice between plague and cholera,” as the UK’s Guardian quoted one voter saying); that the ECB is leaning towards tightening policy ahead; that the Fed is already doing so; and that populism is now widely recognised as being tied to the very globalisation that Mr. Macron is in favour of.”

“Naturally, Macron has promised to help heal French divisions and that he will “do everything in the next five years so that they have no more reason to vote for extremes.” But his first hurdle will be to gain enough support in the June 11 and 18 parliamentary elections to do so. Yes, that’s right, another election folks! A snap poll today shows Macron’s En Marche movement may gain around 25% of the seats…but then again the conservative-right Republicans are seen at 22%, the far-right Front National --now firmly entrenched on the political scene, and set for a rebrand to try to broaden its appeal-- at 21%, the far-left France Unbowed on 15%, and the Socialists on 9%. That doesn’t look like a parliamentary base to actually get much done, does it?”