In addition, his challenges now include navigating the stormy waters of the EU, taking part in the Brexit process and cooperating with US President Donald Trump. The far right has already struck a deal with Éric Ciotti, leader of the center-right Les Républicains, to support some like-minded conservatives so they don’t compete against each other in specific constituencies. But it would still need to get support from other LR MPs or from the Reconquest party, which is also on the far right but whose leader is hostile to Le Pen, to get close to an absolute majority. Marine Le Pen’s party needs at least 289 seats to command a majority in the French parliament, and at the moment the far right looks likely to make big gains on the back of a successful campaign in the European election. Again, opinion polls must be taken with a pinch of salt, but the National Rally and its allies could get between 220 and 260 seats according to current projections.
Political rivals have argued that the left’s win in Sunday’s parliamentary elections stemmed more from fear of the far right than any attraction for Mélenchon or his party. Surprise polling projections in France showed a leftist coalition that came together to try to keep the far right from power has won the most parliamentary seats in Sunday’s runoff elections. That’s both a blessing and a curse for Macron’s liberals and the left wing alliance. The third best-placed candidates in three-way contests dominated by the far right will face pressure to withdraw and rally behind the second best-placed to defeat the National Rally candidate. The French presidential election will impact heavily over the next two months. The vote focuses on the following candidates; the volatile Marine Le Pen or the pro-European and liberal candidate Emmanuel Macron.
As investors brace for the outcome of voting – with final results due on 7th July – this insight from across our macro, market and property teams outlines the potential risks to the France’s debt situation and to French assets. Against this backdrop, the risk for France interactive brokers forex review is that the spread on its debt could continue to widen, with some French bonds already yielding more than lower-rated Portuguese paper. The hierarchy of European sovereign debt markets is being reordered as investors take a long hard look at the underlying fundamentals. In a worst-case scenario, France is downgraded further and struggles to attract foreign capital. Goldman Sachs has warned that the country’s national debt could reach 120% of GDP if RN win the election.
RN may have an incentive to be seen as a moderate and responsible party to boost its chances in the 2027 presidential election. If we look at the behavior of the CAC 40 index after the election day (second round), we realize that most of the time the CAC 40 is going downwards in the weeks that follow. On the financial side, traders across global financial markets fear these political tensions will roil the world’s seventh biggest economy and risk another bout of instability in the heart of the eurozone. The first round of voting on Sunday put Marine Le Pen’s far-right National Rally party in the lead, ahead of the left-wing alliance, with President Emmanuel Macron’s centrist coalition lagging behind in third place.
The far-right National Rally is closer to power than ever
- Goldman Sachs has warned that the country’s national debt could reach 120% of GDP if RN win the election.
- Indeed, investors on the eToro platform are less optimistic about the weeks running up to the next round elections.
- Security Council that plays a major role in global security from the North Atlantic to the Pacific.
- That’s still some distance from the 289 seats needed for a majority, and the left would need to form a coalition if it aimed to put forward a prime minister who would win parliamentary approval.
That presumably means he will need coalition partners — or it’s an electoral strategy to bag a big turnout. The far right party came in third, though still drastically increasing its number of seats. Indeed, RN is now planning reforms in two phases to reassure the markets at a time when France is already saddled with high levels of public debt. Some headline policies – such as the commitment to reduce the retirement age to 60 for some workers and a proposed EUR 7 billion VAT cut on household staples – may be delayed.
However, after Macron got the most votes in the first round, and polls predicted a landslide victory for him in the second, the EU was starting to show signs of optimism, with various financial assets registering impressive gains. With Macron’s victory, the threat of France leaving the EU has been lifted, and a sense of stability restored. Moreover, Macron, who served as Minister of the Economy, is a strong supporter of the EU and has said that he will take measures to strengthen his country’s ties and influence within the Union.
How did such a defining political moment arise from nowhere?
With unexpected speed, France’s left-wing parties have put aside their squabbles and united ahead of the vote. While Ensemble currently controls a workable 250 seats in the parliament, it faces devastating losses in the election. Current projections have Ensemble MPs falling to less than 110 seats in the 577-strong assembly, squeezed by both the left and the far right. Ensemble, the coalition backing the French president, includes his Renaissance party, the centrist Modem and the center-right Horizons party. For starters, French members of parliament are not elected on the basis of proportional representation, but instead through a complicated two-round vote across 577 constituencies where local dynamics play a big role.
First round results of France’s parliamentary election
This helps explain some of the drift that Ms Le Pen’s party successfully drew on in the EU elections. The high stakes of the election seem to have filtered through to voters as well. In the June 30 first round, candidates tied to the National Rally frequently won the most votes in their constituencies — without managing to secure the seat outright.
The important thing with this method is to detect the trend change which requires a good mastery of technical indicators. I work a lot on the US market, it is a very volatile market and adapts perfectly with my strategy. This Popular Investor from France trades mostly stocks and some currencies, and defines himself as a swing trader. He finished 2016 with an overall profit of 77% and so far in 2017, has kept his risk score lower than previous years.
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Public markets
In the coming weeks and months, the political cycle will dominate the newswires, and the minds of market participants. The main candidates’ political programmes will be intensely scrutinised, and the more outlandish campaign promises – especially those that would severely impact the French deficit – may lead to spikes in volatility and in spreads. Arguably, markets find the policies of the left-wing alliance even more alarming. These include reintroducing a wealth tax, raising income tax for the highest earners, and freezing the price of basic food items and energy. French President Emmanuel Macron called a snap general election following the success of far-right parties in the EU elections in June.
Taking stock of contagion risks in EZ bond markets
Candidates who have qualified for the second round have until Tuesday evening at 6 p.m. The left has been torn by divisions, especially after the Oct. 7 attack by Hamas on Israel. France has no tradition of this kind of arrangement, so such negotiations — if they happen — are expected to be difficult and could result in an informal and fragile alliance.
Composition of the National Assembly
Some stocks (eg, tech and multinationals) remain relatively insulated from market movements due to the size of their global business. In fact, only 19% of the French index CAC 40 is dependent on the French economy. This portion generally includes smaller companies whose debt is held domestically. Their financing will be more expensive, which explains their decline on the stock market. The first round of the election is to be held on 30 June followed by a final round a week later. According to the polls, the governing party – President Macron’s Renaissance – is set to lose power although the final outcome of the election is uncertain.
Even if everything is set into motion in mainstream parties to stop a National Rally victory, the outcome will remain uncertain. Voters are the people who really matter — and they show few signs of wanting to follow orders. French members of parliament are not elected on the basis of proportional representation, but through two rounds of voting, across 577 constituencies where local dynamics often play a role. PARIS — France is one step away from electing a far-right government for the first time in the modern republic’s history. Macron’s office says he will “wait for the new National Assembly to organize itself” before making decisions on a new government. The 72-year-old founder of France Unbowed is disliked shakepay review by many moderates and often perceived as authoritarian.
- The far right has already struck a deal with Éric Ciotti, leader of the center-right Les Républicains, to support some like-minded conservatives so they don’t compete against each other in specific constituencies.
- France will go to the polls on Sunday June 30, with runoffs planned for July 7.
- The three main groups — the left, Maron’s centrists and the far right — will all struggle to assemble a stable majority, portending stalemate and paralysis in Paris.
- Some headline policies – such as the commitment to reduce the retirement age to 60 for some workers and a proposed EUR 7 billion VAT cut on household staples – may be delayed.
PARIS — France is voting Sunday in the first round of a parliamentary election that has potentially massive implications for the country’s leading role in the EU and NATO. If an opposition force wins a majority, Macron would be forced to appoint a prime minister belonging to that new majority. In legacyfx review this ‘’cohabitation,’’ the government would implement policies that diverge from the president’s plan. If there’s no party with a clear mandate to govern, Macron could name a government of experts unaffiliated with political parties. Such a government would likely deal mostly with day-to-day affairs of keeping France running.
