We have repeatedly mentioned how financial markets have tended to overestimate the risks of European elections, underestimate the fears of the Brexit and overestimate hopes on Trump’s economic policy. We can even say that this theme has strongly guided our asset allocation choices and our macro-hedging strategies. Well, here we are…
Market relief was significant, in an environment in which, nevertheless, the negative scenarios were not really ‘predicted’, probably proof of relative serenity in the run-up to the elections, or a sharp underweight on France or a wait-and-see attitude. There was no resolutely hostile stance, despite the race leading the drills of Marine Le Pen, then the disappointments of François Fillon, the rise of Jean-Luc Mélenchon, and finally the fears of a scenario Le Pen - Mélenchon in the second round. Overall, the impact on the French and European markets has been limited.
