Markets’ fears over Le Pen outweigh hopes for Macron

Marine Le Pen’s announcement of her radical vision for France, particularly her intentions for an exit from the European Union and the euro, unnerved euro-zone financial markets last week. Her main opponent, the centrist M. Macron, would be a much more reassuring President, with his pledges of pro-business reform and desire to strengthen ties with France’s European counterparts. While opinion polls suggest that Mme. Le Pen will top the first round of voting in late April, they also imply that she will be clearly beaten by M. Macron in the second round in May. Nonetheless, we think the risk of a Le Pen presidency is probably still higher than financial markets currently assume.