Marine Le Pen, leader of the French far-right Front National, openly declares her intention to get France out of NATO and launches her electoral campaign with 27% of polls making it easy for her to reach the second round of the April presidential elections . At the other extreme Benoit Hamon, a young Socialist Party candidate who surprisingly beat Valls in the primaries and whose program rests on the utopia of universal income. He mimics Bernie Sanders, but with little chance of a top position, credited with 16%, and with the only expected result of eroding support for other leftist candidates.
The family-related scandal that has befallen the favorite of this electoral round, François Fillon, has grown to the point that it could force the candidate to resign, throwing the Republicans into confusion, who have already felt the blow from the rejection of the second candidate Alain Juppé . In the centre-right, the conflict between Sarkozists and non-Sarcotics ignites the search for a replacement and so the former Economy Minister Macron, the enfant prodige we had already pointed out after the extraordinary success and the meeting in Deauville during the "Women in the Economy and Society Global Forum” in December, laughs it off and gets stronger with a campaign facilitated by Hollande's expulsion from the socialist court. Macron surpasses Fillon in the latest polls with 22% against 19,5% of the candidate on his way out of the scene, and is projected to a second-round clash against Le Pen, a clash he could win hands down currently with 65% of Elabe-Les Echos predictions.
Despite the persistence of widespread fear in the French capital, 2017 started well with a recovery in tourist flows and hotel attendance in the capital and beyond. Then the recent data on the manufacturing sector with the PMI index rising to 53,6% and auto registrations which mark a +10,6% in January have given some relief to the Oat government bond curve, which on 10-year maturities, it stabilized but with a spread of 60 bp compared to the German Bund, in any case at the maximum for the period. As long as Le Pen remains above 25%, it will be difficult for French stocks to recover ground and even if his victory is excluded at present, and therefore at the dawn of an electoral campaign that promises to be as bloody as the American one, political risk will dominate and condition considerably the attractiveness of the European equity markets.
Certainly across the ocean it is politics tout-court that dominates, rather than a prospect of change in monetary policy, which for now has seen the Fed take a step back on a rate hike in March after the last employment data, while the ECB avoids mentioning tapering despite improving inflation data. Thus the EU faces the Brexit game, but for now he breathes a sigh of relief on Frexit, always without looking at the troubles of the suburbs.
In Italy, the French super managers remain at the center of the stock exchange games between Generali, Intesa, Mediobanca and Unicredit. Precisely for the latter, the season of capital increases opens. And the last of the mysteries of the French game in Mediobanca is that strange report on Italexit also taken up by the Anglo-Saxon press and with questionable macroeconomic assumptions that make it clear that there is much more than a mere political factor in the game being played on Generali. Two months of siege of the Bastille await us.
