This weekend, the first stage of water promises to be a very eventful European election takes place in France. The first round of the French presidential elections will be held on Sunday 23 with polls expected to open early in the morning and close at 8 PM. The first exit polls should be published at this time, and by midnight local time, we should have a clear idea of which candidates have made it through to the second round. Check your out guide to the french elections.
According to Deutsche Bank’s guide to the French elections published this morning, based on the current polls it looks as if Macron vs. Le Pen will make it through to the second round where Macron is expected to win comfortably. Le Pen would have to win the first round with a gap of 5 percentage points or more and/or the participation rate in the second round to fall below 60% for her chances to improve significantly.
A Le Pen win would be the most damaging for markets according to the report with French OAT-Bund spreads expected to increase by around 200 basis points if this scenario unfolds. A Macron win would be the least damaging for markets with a spread widening of 45 bps predicted.
Guide To The French Elections
Based on current polls, whichever combination of candidates make it through to the second round Le Pen is not expected to progress much further. But as both Trump and Brexit have shown, polls can be misleading, and according to Deutsche, there’s still everything to play for in the coming weeks. The analysts estimate that based on past election trends in a Macron-Le Pen second round, 30% of Fillon voters would switch to Le Pen, but even in this scenario they assign an 80% chance to Macron winning in the second round unless Le Pen can win the first round with a gap clearly larger than five percentage points or if there is a low participation rate in the second round.
In a Fillon-Le Pen second round, the majority of left-wing voters would abstain, which would increase Le Pen’s chances but based “on the current polls and historical polling errors, we would expect Fillon’s chances to win the second round to be around 70%.” If Macron gets through the second round, he is likely to receive the largest transfer of votes from other candidates.
Also weighing against Le Pen is the countrywide movement against the National Front, which began in the 2015 regional elections. French political polls have been careful to ensure support for this right-wing party is not underestimated, and since 2002, polls have been fairly accurate representing National Front support, which is declining from its highs. Recently in the 2015 regional elections – National Front candidates were defeated by wide margins against center-right candidates in two regions contrary to opinion poll expectations.