Latest Polls Favour Macron
The latest polling results for the French election race show that the centrist candidate Emmanuel Macron is consolidating his lead over the far-right candidate Le Pen in both the first and second rounds of the voting. The Harris Interactive Poll now has Macron winning the first round of the voting with 26% of votes ahead of Le Pen’s 25%. This is the second poll in the last week to place Macron above the Le Pen signaling a building of support for the former economy minister.
The race for the Presidential elections has been an interesting one from the start with voters initially surprised by the fact that the former socialist incumbent Francois Hollande decided not to run for a second term. Voters were then further shocked by wins the primaries by a contender that poll makers had previously ruled out.
The race has also seen plenty of scandal with the conservative candidate Fillon having to relaunch his campaign following investigations into allegations of fraud involving payments to his wife for falsified work. Fillon is currently pegged to come in third in the first round of voting with 20% of votes so far in the Polls.
Le Pen Forecast To Lose in Both Rounds
Polls now show Le Pen losing in both rounds of voting, while previously she had been indicated to win the first round of voting. Although Le Pen’s polling is unchanged, showing no weakening of support, it is the surge in support for Macron that has the far-right candidate behind in the polls.
The most recent Harris survey, which was conducted on March 6th-8th and involved just shy of 5,000 participants, showed that although Macron voters remained among the most undecided among those supporting leading candidates, there had been a 10% increase in those intending to vote for him.
Taking the polls at face value suggests that Macron is the most likely candidate to win considering both the surge in support for him and his current lead in the polls. However, there is still a strong risk that the polls are underestimating the level of populist support among voters as was the case with polls ahead of the both the Brexit referendum and the Trump election. It is precisely this risk that is keeping markets unsettled heading into the election as investors are still cautious about the prospect of a surprise win for Le Pen.
France Not Traditionally Anti-Euro
However, support for leaving the Eurozone is likely quite limited in France. The European Commission regularly poll on a numb of topics related to the Euro and the Eurozone such as whether people are in favour of the single currency. In France, more than 60% of are in favour and only slightly more than 25% are against. The French economy has shown resilience and wasn’t affected as much as other key euro area economies by the tightening of financial conditions and slump in foreign demand over recent years.
Although GDP suffered some correction growth has now recovered and returned to higher levels. However, the Periphery Economies are far from achieving this goal, specifically in countries such as Italy. While momentum in GDP growth has been good in France relative to periphery economies, it still Remains Sluggish Compared to Germany.
French Economy Performing Well But Still Sluggish Compared With Germany
The French economy has shown resilience and wasn’t affected as much as other key euro area economies by the tightening of financial conditions and slump in foreign demand over recent years. Although GDP suffered some correction growth has now recovered and returned to higher levels. However, the periphery economies are far from achieving this goal, specifically in countries such as Italy. While momentum in GDP growth has been good in France relative to periphery economies, it still remains sluggish compared to Germany.
EUR initially strengthened in response to the release to the polling results before being weighed on by a surge in USD linked to a much stronger than expected ADP Employment reading. EUR flows continues to gyrate around developments in the French election candidate and this dynamic is expected to intensify as we get closer to the elections.
The rally in EUR has seen EURAUD recovering off lows and is now challenging a key structural resistance level at the 1.41 area. A break here paves the way for a deeper correction higher to test bigger resistance at the 1.4365-1.4427 area.
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