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Relief for French bonds as political jitters ease

Monday, February 27, 2017 - 01:45

French 10-year bond yields have hit a one-month low, pushing other euro zone sovereign yields lower, as polls showed centrist candidate Emmanuel Macron would easily beat the far-right's Marine Le Pen in May's presidential election runoff. Sonia Legg reports

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His economic proposals may be paying dividend already. Emmanuel Macron only made a promise to cut corporation tax and 120,000 public sector jobs last Friday. Just days later and two polls show the centrist candidate is gaining ground in France's closely watched presidential election. He's moved ahead of conservative candidate Francois Fillon And both polls suggest the former economy minister would easily beat the far-right's Marine Le Pen in the May's run-off, although after Brexit and Trump few are prepared to rule out a shock. (SOUNDBITE) (English) CITY INDEX, MARKET ANALYST, KEN ODELUGA, SAYING: "I would say we have no better guess-timate than 50-50 as to the likelihood of a market unfriendly, a market negative outcome from the election." Unease at Le Pen's strong showing has hurt French government bond yields in recent weeks - her anti-euro stance unnerving investors. The latest poll findings sent 10-year bond yields to a one-month low. Macron's alliance with another centrist candidate may have also helped. Along with a promise to bring growth back to rural areas. (SOUNDBITE) (French) FRENCH INDEPENDENT PRESIDENTIAL CANDIDATE, EMMANUEL MACRON, SAYING: "I will defend measures of guarantee and protection for farmers so when world prices suddenly crash, or there's volatility, as we've seen with milk, you can still survive." Farmers could once be relied on to back mainstream conservatives. But years of crisis in the sector have left them feeling unloved by politicians. Le Pen will trying and show she cares by visiting the Paris agricultural fair later this week. She is still expected to lead the first round of voting in April. But then lose to Macron, or less likely Fillon, in the May run-off.

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Relief for French bonds as political jitters ease

Monday, February 27, 2017 - 01:45