LONDON May 7 Emmanuel Macron was elected
president of France on Sunday with a business-friendly vision of
European integration, defeating Marine Le Pen, a far-right
nationalist who threatened to take France out of the European
Union, early projections from five polling organisations showed.
Below are reactions from economists, analysts, fund managers
and other market experts.
STEPHEN MITCHELL, LONDON-BASED FUND MANAGER AT JUPITER ASSET
"Voters elected for Emmanuel Macron’s pro-business policy
proposals, which have the potential to unlock long-held-back
investment and stimulate French markets.
"French voters have swung the pendulum back from Hollande’s
paralysing tax increases to more conventional tax cuts and
labour reform. Liberalisation of key industries now becomes a
key discussion point heading into the June parliamentary
"For Europe, this result – and Angela Merkel's strong
showing on Sunday in the Schleswig-Holsten state election - mean
the core of Europe pulls closer together. Macron wants to
improve relations with Germany, although he is not without
"Markets had confidently discounted this result but French
and Italian government bond yield spreads over Germany should
narrow further. Equities will react positively – but mildly so –
now awaiting to see if Macron in June has a new prime minister
and parliament who share this young leader’s vision for
revitalising France. Shorts had largely been covered after the
JAMES ATHEY, SENIOR INVESTMENT MANAGER AT ABERDEEN ASSET
"In spite of the low overall turnout, the core of Le Pen
supporters was nowhere near sufficient to overcome Macron's
broad-based, but by no means convincing, following.
"Markets will certainly take this as a positive, but given
the moves of late had priced out most if not all of the
political risk premium, I do not expect a huge move. The reality
is that this was only one of the issues currently facing
investors in French assets.
"We now must look to the parliamentary elections where it is
by no means certain that En Marche! gets a majority. Without it
Macron will need to form deal by deal coalitions making it far
less likely he can pass his agenda without compromise."
STEPHEN JEN, CEO OF EURIZON SLJ CAPITAL:
"It’s likely that the markets will take this news well. What
has happened so far this year is that the most powerful driver
of markets - global reflation – had been partly held back by
disappointments from the Trump administration, and worries about
the French elections.
"What the French election results show is that the will is
still there in some countries in Europe to stay with the
European project. However, the European project is being torn
apart by several global trends, including trade globalisation,
which I believe is incompatible with trade
regionalisation. Europe must take this opportunity to undertake
institutional reforms at the European/Brussels level, in
addition to national level reforms.
"I see significant risks of an inexperienced politician and
technocrat not being able to execute properly well-intended
policies. We will see. It is important to give president Macron
the benefit of the doubt."
BILL STREET, HEAD OF INVESTMENTS FOR EMEA AT STATE STREET
"Emmanuel Macron’s victory gives markets a much deserved
breather from European politics. This result, combined with last
week’s preliminary Greek debt agreement, will be enough to
support a short-term relief rally. Looking forward, Macron only
offers upside surprises.
"In a do-nothing scenario, we have the status quo of
political paralysis, but with a favourable external environment
and steady growth improvement. In the goldilocks scenario,
Macron gets a working parliament and builds a partnership with
Germany to launch meaningful reforms. That would deliver a
substantial boost to markets by year-end, which is currently not
priced in. In either scenario we could see renewed market
pricing for accelerated European Central Bank policy
normalisation, especially if the data continues to impress."
PAUL LAMBERT, LONDON-BASED MANAGER OF INSIGHT'S ABSOLUTE
"I'm not sure there will be a huge reaction because most of
the risk premium had been taken out after the first round. If
you compare where euro/dollar should be versus bond spreads, it
was pretty much where it should be.
"It will, however, be a relief to markets and in Europe it
may calm markets about forthcoming events like the Italian
election, where people appear to be nervous. We have now had the
Dutch election, the Austrian election and the French election
where people feared the outcome and it appears, on the whole,
that Europeans are not as euro-sceptic as people feared. I'd
expect a fairly muted response - some further euro
strengthening, some further tightening of French bond spreads to
Bunds but I wouldn't expect a very big move."
PHILIPPE WAECHTER, PARIS-BASED CHIEF ECONOMIST AT NATIXIS
"The risk on markets is that people 'buy the rumour, sell
the fact', as everyone has already been playing a Macron win in
the past days.
"Next, markets will be watching the legislative elections,
of course. The estimates so far have been for a majority, which
would make things a lot easier for him. The French are
legitimist, likely to give the elected president a majority.
"We'll also be closely watching his pick of prime minister -
that will be the most important in the near term. He hasn’t
given any indication of who this may be, and they will be
essential in order for him to implement his whole legislative
"It's clear from these results that the participation was
not very high, and French society is fragmented. In the
immediate aftermath, one of Macron’s duties will be to reconcile
DAVID VICKERS, SENIOR PORTFOLIO MANAGER, RUSSELL
"When we were looking at Friday's predictions for the euro,
the average year-end forecast was $1.06 but there has been a lot
of political overhang. Now that we've had this result, we think
those forecasts will be moved higher as political risks are
removed and (that) frees up the ECB to think more about
unwinding quantitative easing in the face of stronger data.
"People have been unwinding tail risk since the first-round
results, so Europe is one of the best-performing markets in the
year-to-date having lagged previously.
"I expect spreads to be a bit tighter tomorrow and it will
be interesting to see how duration reacts. The French/Bund
spread has tightened already and further tightening could be
limited. There is a risk now that bond yields could head higher
"Macron does have to reconcile his country and I'm not quite
convinced we've fully reversed anti-establishment sentiment.
Undoubtedly he is a pro-European, so that could cast a shadow
over Brexit negotiations."
OCTAVIO MARENZI, PARIS-BASED CEO OF CONSULTANCY OPIMAS:
"Emmanuel Macron will now be in a position to take a very
uncompromising position with the UK over Brexit. This is a fight
that will get ugly, with Macron trying to attract as much
business as possible away from the UK, with a special focus on
the financial services industry. Macron is going to lower
corporate taxes, create incentives to invest in equities, and
reduce red tape. This will make Paris a magnet to wrest business
away from London. At the same time, he has made it clear that he
opposes any special arrangement between the UK and the European
ROBERT TIPP, CHIEF INVESTMENT STRATEGIST AT PGIM FIXED
INCOME IN NEW JERSEY:
"Assuming that following today's vote we move towards a
situation where Macron may actually be able to advance a reform
agenda and make some progress on the fiscal side, that should
provide a possible underpinning for French markets and some of
that will spill over to other markets, especially in Europe.
People have been bashing Europe for years, (saying) the euro
zone is a failed experiment, but I think that countries that
have stuck to the rules of the euro zone have succeeded."
"There have been some anxious moments over the last few
months with Austrian, Dutch and French elections and some
uncertainty in Germany, but the bread appears to be falling with
the buttered side up."
VINCENT JUVYNS, GLOBAL MARKET STRATEGIST, JP MORGAN ASSET
"First, the outcome was in line with expectations, to a bit
higher. This was well priced into the market when you look at
the CAC-40, bank stocks and the euro. So, it was well priced in
after the first round. We've also had good macro economic data,
which shows the euro zone economy is getting better.
"All of this points to some good performance in European
assets, probably more in stocks than fixed income. (Bond)
spreads have already tightened after the first round. But
clearly the fact that political risk has reduced could see
investors globally converging towards Europe.
"There are some nuances to bring - the country is divided
and the turnout was low. It is a victory for Macron but he will
need to win French hearts and win seats in the parliamentary
elections to enact reforms."
CRAIG ERLAM, SENIOR MARKET ANALYST, OANDA, LONDON
"It wouldn't surprise me if we had a little bit of a relief
rally on the back of this. The result was widely expected... It
is one more potential political risk event pushed to one side
and then it's on to the next one because we have the Italian
election some time in the next 12 months... It just goes to show
that the disenchantment we saw in the UK and the U.S. with the
political establishment is not as prevalent in Europe as it is
elsewhere. So a bit of a relief rally but I don't think there is
going to be anything too extreme because markets had all but
priced this in anyway."
NAEEM ASLAM, LONDON-BASED ANALYST AT THINKMARKETS
"We are expecting the European markets to roar when traders
start trading. This has eased a lot of concerns and investors
will feel more comfortable in holding the riskier assets. The
outcome of this elections result has also assured investors that
the French debt ratings would not change either. Thanks to
French people who do not like to surprise the people and what
the polls predict is what we get in the results."
"People and investors are feeling joyful because there will
be no erection of barriers on the French border to restrict
trade. 'Frexit' genie remains in the bottle and Emmanuel Macron
has won the election. French voters have clearly expelled the
populist surge which resulted in Brexit and carried Donald Trump
to the White House.
"All eyes will turn towards the June parliamentary election
because Macron needs to make sure that he has a strong hand in
the parliament which will aid him to take swift moves."
(Compiled by Jemima Kelly; Additional reporting by Dhara
Ranasinghe and Nigel Stephenson in London, Helen Reid in Paris,
and Olivia Oran in New York; Editing by Susan Fenton)