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French election 2017

Marine Le Pen and Emmanuel Macron are set to contest the second round of the French presidential election on 7 May. Find out what that means for key markets like EUR/USD, gold and the DAX, and open an account to take a position.

All trading involves risk. Losses can exceed deposits.

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    Deal key indices like the DAX as results come in

With increased volatility comes increased risk, which IG will reflect ahead of the vote by raising margins on affected markets.

Why does it matter to traders?

Unlike other major elections in EU states – including those arriving before it in the Netherlands and after it in Germany – until now the French election has featured no clear frontrunner. 

But Marine Le Pen and Emmanuel Macron have seen off late rallies from Francois Fillon and Jean-Luc Mélenchon, and will go head to head on 7 May in an election that marks a clear move away from the political status quo. For the first time in modern political history, the French presidential election second round will feature no candidates from either mainstream party.

What happens now will have major ramifications for the markets, in France and beyond. While many see Macron as a clear favourite, the French public could yet use this election to make a statement against the euro and the EU. And if they do, the fallout could be serious and lasting.

Key markets to watch

Markets Bid Offer Updated Change
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EUR/USD
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EUR/GBP
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France 40
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Germany 30
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AXA SA
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BNP Paribas SA
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Societe Generale SA
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Total SA
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Prices above are subject to our website terms and conditions. Prices are indicative only.

Is ‘Frexit’ on the cards?

While the French election could certainly undermine the EU, it probably won’t lead to France exiting the union just yet. Frexit would require a victory for Marine Le Pen, and opinion polls have consistently indicated that she will make it through to the second round before losing to Macron.

While polling has proven largely correct in the French election so far, it certainly isn’t foolproof. But even if she secures victory, Le Pen has been far more outspoken about leaving the euro than the EU itself.

Her 144 ‘commitments’ to the French people include a promise to take France out of the European Monetary Union (EMU), but only to hold a referendum on EU membership if the union refuses to comply with her proposed reforms. And even if she does decide to hold a referendum, she can’t do so without parliament’s approval — which would require a very strong performance for the anti-EU FN party in June’s legislative elections.

What would each candidate mean for the markets?

After many twists and turns along the way, the French presidential election is now down to two candidates. Here’s what each one might mean for the markets:

Emmanuel Macron

Party: Forward! (EM)

Markets impacted: French stocks

France’s former Minister of Economy under the Socialist party before he quit to launch his own centre-left movement, Macron has made ending traditional party politics the crux of his campaign — but he also has plans for France’s underperforming economy.

Those plans include reforming France’s pensions programme, cutting corporation tax and a €50 billion investment in public spending. However, he’s been vague about how those plans will be funded, foreseeing €60 billion raised through increased employment and greater ‘efficiency’.

His policy on Europe, though, is clear: he’s committed to keeping France at the heart of both the euro and the EU.

Marine Le Pen

Party: None (previously National Front FN)

Markets impacted: Euro crosses, key indices

Le Pen has made exiting the euro a key part of her campaign — and has been vocal about her disregard for the EU in its current state.

France leaving the euro would probably signal the death of the single currency, resulting in huge economic turmoil as 19 eurozone states attempt to deal with the aftermath.

An outspoken Eurosceptic taking charge of a major European economy would not look good for the short term future of the union, so any signs that Le Pen is overtaking Macron in the polls could make markets anxious.

Open an account now

Take a position on the impact of key elections, with EUR/USD from just 0.6 points and 24-hour dealing on the France 40.

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