1st round occurs April 23
Volatility has hit Markets hard in the lead up to the first round of the French Elections. The stock market was sold off to the tune of 1.6% in yesterday’s trade, whilst a scramble to buy Yen against Euro was evidenced as a risk off strategy in currency markets.
One thing for certain in markets is, uncertainty creates volatility.
Monday morning in early Sydney trade will be less than pleasant for traders and participants jump at shadows as exit polls reveal who the front runner/s are.
The big fear is that far-right National Front candidate Marine Le Pen will win, since she has run on a platform to divorce France from the euro — an action that could threaten the future of the entire euro zone. As it stands now, there is a good chance Le Pen will emerge from the first round pitted against one of three candidates: far-left candidate Jean-Luc Melenchon, conservative Francois Fillon and centrist Emmanuel Macron, a former economy minister.
Buckle up for some extreme volatility over the next month. The runoff election is set for May 7.
Over the next few days, you may see the risk off trade continue, however, remember the Trump victory. All the value was in the 2nd phase trading. Buy the rumour, sell the fact.