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The bond yield spread between France and Germany directly linked to opinion polls

According to betting odds, the win probability of Marine Le Pen has not risen so much over the last few days but the lag of Marine Le Pen behind the favorite (François Fillon then Emmanuel Macron) has fallen to a fresh low. The win probability of Marine Le pen according to betting odds is 33% : A) close to the probability of a Trump victory or a Brexit victory before the elections according to betting odds and B) not so far from the 45% of Emmanuel Macron. The recent widening of French spreads has probably not been caused by a surge of popularity of Marine Le Pen but directly by the sharp and sudden decline of François Fillon. In other words, markets demand a premium to compensate the risk of bad surprises linked to the mainstream candidates (like a new scandal emerging before the elections).

 

Graph_Franceelections
Bastien DRUT, Strategy and Economic Research at Amundi
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The bond yield spread between France and Germany directly linked to opinion polls
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