French Elections and Forex: Exit polls are a French asset and Euro positive outcome

The following is based on research from Peter Rosenstreich, Head of Market Strategy at Swissquote Group Holding SA (SWX:SQN).

Peter Rosenstreich, Swissquote

If the current French Presidential exit polls are correct, then they are showing a very market-friendly result.

The failure of Marine Le Pen or Jean-Luc Melenchon to surge on voting day should be viewed as a vote for the EU.

The polls are an indication that Emmanuel Macron and Le Pen will move forward to the second round run-off on May 7.

However, the failure of Le Pen or Melenchon to sway undecided voters or unlock closely-guarded voting behaviours will come as a major relief to investors fearing uncertainty over whether the second round would bring a new set of complexities. At present, extreme volatility has been avoided.

We see the exit polls for Macron, Le Pen, Francios Fillon and Melenchon at 23, 22, 19 and 19 as a French asset and Euro positive outcome.

We anticipate an orderly FX market opening, with marginal Euro buying (as markets had positioned for this outcome) as exit polls become official results.

We would remain long EURCHF on a rejection of an anti-EU vote.

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