For Stockmarkets now it´s necessary to understand two issues:
1. Wich pairs could be the result of the French Election 1th rounds
2. Bets and hedges against France
Knowing the details are necessary for any riskmanagment. This knowledge is not written in yesterdays charts.
The first round of the 2017 French presidential election is set to be held on 23 April 2017. Should no candidate win a majority, a run-off election between the top two candidates will be held on 7 May 2017.
4 candidates means that 6 pairs are possible:
- LePen vs. Macron: Expected. For Stockmarkets neutral or positiv opening on Monday April 24
- LePen vs. Melenchon: Sharp Sell Off up to stockmarket crash on Monday April 24th possible
- LePen vs. Fillon: Neutral or lower opening on Monday April 24th.
- Macron vs. Fillon: Rocket straight up on Monday April 24th.
- Macron vs. Melenchon: Higher opening on Monday April 24th.
- Fillon vs. Melenchon: Sell off likely.
- Melenchon could be supportet by Benoit Hamon voters (8% likely voters for Hamon right now)
- LePen supporters could have fears, that a left wing politican (Melenchon) or a center politican (Macron) could become next president. It might be possible that some could vote for Fillion in the first round.
The majoritiy of French Voters ether don´t want LePen or Melenchon to win and might vote for Macron. If ever Macron would win the first round ahead of LePen stockmarkets will open on Monday April 24th with a 1% gap to the upside and will continue this upmove.
Also possible, but unlikely is a single winner in the first round, elected by strategic voting:
Macron: At least 2-3% upmove on Monday April 24th
Fillon: 2-3% upmove on Monday April 24th.
LePen: Sell Off or Stockmarket Crash
Melenchon: Sell off or Stockmarket Crash
All in all according to todays number it is impossible to trade any likely result. Maybe this is going to change until next friday, march 21th 2017.
Even a straddle might not be succesfull. Some results might be a "non event" and could cause a sideways pattern until the second round of election on May 7th 2017. Who ever can not resist to bet on any result should compare this to a regular roulette game, expecting red or black to come and same time threatened "green" to come. Who ever can not resist to bet on any result should compare this to a regular roulette game, expecting red or black to come and same time threatened "green" to come. If ever polls might not change or traders have precise knowledge about French culture and politics remind that any position is at a high risk. Shortseller can even get burned like traders who are invested in long positions. Remark: Keep in mind that 99% if all traders don´t know about this details bcs. they don´t care. If you understand, that 6 pairs are possible now and that strategic voters might cause, that the polls are deeply wrong same like that a very low number of voters on April 24 could trigger an unexpected outcome that you all belong to a small minority knowing about whats going on.
All other traders will learn about this like on the Brexit or Trump election and than it might be to late. Stockmarkets reaction can be even to the upside than to the downside.
Cost of protecting against a drop in the Euro Stoxx 50 doubles
VStoxx, CAC 40 volatility climb for 10 straight days
With less than two weeks to go before the first round of French presidential elections, investors are racing to protect gains that have pushed the region’s shares to their highest prices in more than a year.
The cost of hedging against declines in the Euro Stoxx 50 Index has surged to its highest level since the U.K. referendum on European Union membership, rebounding from near a 15-month low in just a little more than a week. Even as equities have remained stable, a gauge tracking volatility expectations has climbed for 10 straight days, the longest streak since November. Source: https://www.bloomberg.com/news/articles/...
Quote: Rise of far-left candidate is a reminder that euroskepticism is widespread, analysts say
Investors have learned one thing about politics over the past year: Don’t take anything for granted.
Nowhere is that more apparent right now than in the French presidential race where a recent surge in support for socialist and euroskeptic candidate Jean-Luc Melenchon has added a layer of uncertainty to the country’s election. That is bringing “Frexit” fears back to the fore, rattling financial markets this week.
The spread between French and German 10-year government bonds has jumped to a seven-week high at 75 basis points, indicating investors are becoming more nervous about the election outcome, according to analysts. That is also weighing on the euro EURUSD, +0.0094% , which on Tuesday traded around a one-month low at $1.0579, before recovering to $1.0613 later in the session.
April 11, 2017, 10:33:00 AM EDT By Reuters
Quote: With just 12 days to go until the first round of voting in
the presidential election, polls are tightening. For weeks
investors have been betting that the run-off would be between Le
Pen and the centrist Emmanuel Macron, with Macron beating the
far-right candidate comfortably in the second round.
But investors are rethinking that assumption. A poll from
Ifop on Tuesday put Melenchon in third place, ahead of the
conservative Francois Fillon and just four points behind Macron,
and confirmed that almost one-third of voters are still
undecided. Source, Read more: http://www.nasdaq.com/article/le-pen-no-...
The French elction now is unpredictable.
Opinion Way polls:
Centrist Emmanuel Macron held on to his lead as favorite to win France's presidential election, a closely-watched poll showed on Wednesday, although it showed that the first round of voting at the weekend Sunday remains too close to call. Source: https://www.investing.com/news/world-new...