Top money manager warns against complacency over Macron’s election victory in France


Europe’s largest wealth manager sent a warning to investors who are already convinced the company is pro-business Emmanuel Macron will win the French presidential election in a runoff against the nationalist leader Marine LePen this month.

Markets seem complacent about a Macron win,” wrote Vincent Mortier, Amundi’s chief investment officer. “The likelihood of a non-market-friendly Le Pen victory is not negligible” and “Hedges should be considered”.

Sunday’s first round of voting came as a relief to investors as Mr Macron ended up ahead of Ms Le Pen by a slightly larger margin than originally expected.

With less than two weeks to go before the April 24 runoff, both Ms Le Pen and Mr Macron are eyeing the 7.7 million people who supported far-left veteran Jean-Luc Melenchon in the first round. While Mr Macron’s lead over Ms Le Pen has grown on the poll average, it could still be a close race.

Amundi remains “cautious” on European equities and the euro, favoring quality US names and the value sector instead.

“Now is not the time to add more risk to portfolios, but to play rotations within markets and implement short-term volatility hedging,” says Mortier.

According to a poll of voting intentions released Tuesday by Ifop-Fiducial for LCI, Paris Match and Sud Radio, Mr Macron would beat Ms Le Pen by 53 percent to 48 percent in the runoff. Volatility could accelerate in the coming days as its lead shrinks, Mortier says.

A debate between the two candidates, scheduled for April 20, could be “decisive” and will be closely watched by investors, he said.

Ms Le Pen’s position on international affairs is another risk factor for investors amid the war in Ukraine, according to Amundi. Mr Macron’s allies have focused on Le Pen’s ties to Russia’s Vladimir Putin. The nationalist leader has dropped her demands France to leave the euro, but has spoken out against Macron’s plans for greater EU integration.

While the first round had “little” impact on markets, Amundi says it should be viewed as a potential risk to periphery debt. A Le Pen victory would “shock” Europe and stifle progress on energy policy, defense and fiscal integration, Mortier said. Top money manager warns against complacency over Macron’s election victory in France

Fry Electronics Team

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