Amundi: Macron's re-election is positive for French assets

Amundi: Macron's re-election is positive for French assets

April 26, 2022

Politics France
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Didier Borowski, Head of Global Views at the Amundi Institute, discusses the re-election of Emmanuel Macron in a new Investment Talks.

“In Sunday's second-round runoff, Macron defeated far-right National Front leader Marine Le Pen by 58.5% to 41.5%, confirming his leader in the most recent polls. However, the outcome in the second round was much narrower than in 2017 and the abstention rate was put at 28%, the highest in 50 years. 

The challenge for Macron over the next five years is to strengthen the French economy and its competitiveness, based on its better position than for other Eurozone countries, due to the low dependence on Russian gas, as well as deal with significant dissatisfaction with the political class. In this regard, the need to maintain a parliamentary majority in the legislative elections planned for June will be crucial for implementing his economic policy. On the European front, the re-election of the French president reinforces his vision of a sovereign Europe, with more unified EU foreign and defence policies plus further energy independence going forward.

Although Macron’s win had been somewhat anticipated by the markets, the election outcome has removed a key risk. For fixed income, the reduction of political uncertainty could tighten OAT bond yields by around 10 bps vs. Bund. The re-election is also positive for the EURUSD exchange rate, as well as for French equities, which offer a compelling valuation on relative value.”

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