James Trescothick

With more than 20 years of experience in financial service industry, James is our Senior Global Strategist and the co-producer and presenter of easyMarkets educational videos. When he is not working on educational programs or preparing webinars, you can find him with the easyMarkets team giving seminars around the world.

The hotly contested French elections have become a four-way race, latest polls show, after Communist-backed presidential candidate Jean-Luc Melenchon surged to catch up with Republican, Francois Fillon.

Melenchon’s popularity surged after strong performances in two televised debates. Public opinion polls showed that roughly one-in-five French voters said they would vote for him.

The leftist leader recently spoke in Marseille, where he described his candidacy as a third option for voters who are dissatisfied with extreme right-wing politics and supporters of free market economics. His comments were in reference to Marine Le Pen and Francois Fillon.

Melenchon’s platform consists of radical policies that could shake up the French economy. This includes a €100 billion stimulus plan and a reduction in the working week to 32 hours. His plan also stipulates an overhaul of the European Union (EU) and the removal of France from the North Atlantic Treaty Organization (NATO).[1] His policies are unlikely to be viewed favourably by the financial markets.

National Front leader Marine Le Pen is also running on a “radical” platform. Her ideal French society has a closed-border policy and is independent from the Eurozone.

While analysts have long held that the presidential election would require a second round of voting, predicting which two candidates will emerge for the winner-take-all ballot is becoming increasingly difficult.

France’s two-stage election begins April 23. Should no candidate secure a majority, a runoff election between the top two candidates will be held on May 7.

The latest Kantar Sofres poll published Sunday showed independent Emmanuel Macron and Marine Le Pen tied for first place with 24% each. Melenchon is third at 18%, with right-wing candidate Francois Fillon at 17%.

When margins of error are factored in, the polls suggest all four candidates have the potential to make it to the second round of the election. However, pollsters still give the edge to Macron in the runoff vote.[2]

Francois Fillon has suffered a huge setback over a ‘fake work’ scandal involving his wife, Penelope Fillon. The conservative leader has been summoned by judges for questioning over allegations he gave his wife a lucrative government job she never performed.[3]

French election risks are sending jitters through the financial markets. France’s CAC 40 declined at the start of the week, while French and German yield differentials widened. Uncertainty about the outcome of the upcoming vote is expected to weigh on investor sentiment over the next two weeks.

 

[1] Agence France-Presse (April 10, 2017). “Leftist candidate Jean-Luc Melenchon shakes up France’s presidential race.” The Guardian.

[2] Mark Deen and Helene Fouquet (April 10, 2017). “French Election Becomes a Four-Way Race as Melenchon Surges.” Bloomberg.

[3] Al Jazeera (March 1, 2017). “Francois Fillon to be summoned over ‘fake work’ scandal.”

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