This result should lead to a material reduction in perceived political risk in Europe. We do expect some risk premium to linger until legislative elections in June. Both Macron and Le Pen are not part of the mainstream parties that have dominated French politics in the Fifth Republic for nearly 60 years. If Macron becomes France’s next president, he may struggle to implement his agenda without a stable parliamentary majority.
BlackRock: The market implications of the French vote
Brian Singer, CFA, of William Blair discusses the linkage between geopolitics – especially populism – and asset allocation.
What are some of the main investment factors investment managers should consider in today’s environment?
Three primary factors: central bank behavior, geopolitics, and populism. Central banks have spent a long time building their balance sheets, and now we have to look at a long time unwinding the balance sheets. Geopolitics–the world now is geopolitically unstable. It wasn’t that way when I first got into the industry, but now we have to take account of those developments around the world. And then, finally, populism. Populism is a huge movement, and it’s a movement that stands for nothing. It stands against something, and that’s the existing elite.
The eurozone’s slow can be attributed to missteps in monetary policy, especially compared to the US and UK. A bold ECB QE program can solve it.
David Cameron’s stance against the free movement of labor across the Eurozone has run up against an ultimatum from Angela Merkel. Could a British exit come next?
Germany’s Demand for EU Austerity is wrong – but internal politics may be the catalyst that threatens the EU project