The impact of the presidential election in 2017 on the financial markets

Between 23 April and 7 may 2017, France will proceed with the election of the new president of the Republic. The surveys do not allow to define who is the potential winner of the presidential election in 2017, and uncertainty reign, we know, however, the four favorites of this election. As a currency trader, you probably see an opportunity through these elections, which would allow you to speculate on the money markets, and you’re right. The election of the new French president could impact the Forex market and in particular the Euro. Please be aware, however, that the impact of the presidential election is not limited to the european currency, it can impact a large number of currency pairs, but also indices and shares, this was also the case during the election of Donald Trump president of the United States.

The favorites of the first round

  • François Fillon (The Republicans)

François Fillon was the prime minister of France from 2007 to 2012. The reform includes a draft output of the legal duration of work (35 hours), the elimination of the tax on capital and the reduction of half a million jobs in the public sector, the VAT increase and the passage of the retirement from 62 to 65 years. With the implementation of its promises of economic reform, this would be a boost significant for businesses and especially for the stock market in French, it should therefore be beneficial to the euro.

  • Emanuel Macron (Power Up !)

Emanuel Macron is one of the youngest candidates to the presidency, from the top of his 39 years he has already served as minister of the economy. He has since launched his own movement “In the Market”. His plans include a more control of the political powers, the end of the 35 hour week for young workers. Macron has remained rather vague on its policy and insists in particular on the aspect “safety” of his campaign. He has promised to reduce the corporate tax and invest 50 billion euros in public spending.

  • Marine Le Pen (National Front)

Marine Le Pen, a figure of the far-right National Front. She was a candidate in the presidential election of 2012 and got a 17.9/100 votes behind Nicolas Sarkozy and François Hollande. Its measures include the reduction of immigration, the increase in social security benefits, but one of the flagship measures of the programme is to hold a referendum on the exit of France from the euro zone. After Brexit, in case of victory of Marine Le Pen could take place on Frexit. The election of Marine Le Pen president of France would send shock waves to the European Union and would be concerned about quite possibly the financial markets as to Europe, the anxiety of the investors could then be reflected with a decline of the euro.

  • Benoît Hamon (Socialist Party)

Benoît Hamon, member of the Socialist Party, its plans include the payment of a monthly income to universal for the French citizens whose net income is less than 2200€, review the MINIMUM wage increase as well as the minimum social benefits.

Financial markets to watch

The French presidential election of 2017 is likely to result in an increase of the volatility on several financial markets and regardless of its outcome. We advise traders to monitor in particular the following markets :

  • EUR/USD
  • GBP/USD
  • Currency pairs EUR/XXX and XXX/EUR
  • CAC 40 stock market index French)
  • DAX30 (German stock index)
  • EU50 (european stock market index)

All of these financial markets can be handled on the different platforms of the forex brokers and binary options brokers since it is of major markets.

Take advantage of the French presidential election of 2017

Whatever your trading strategy or even if you don’t have it yet, we advise you to watch carefully our video trading fundamental, in which we perform a demonstration of the strategy the straddle is perfectly adapted to this type of ad a major economic. Apply this trading strategy on currency pairs such as EUR/USD or GBP/USD is quite possible and could potentially benefit from the impact of the results of the 1st and 2nd rounds.

The result of the presidential election

As a reminder, the results of the first round of the presidential election of 2017 will be revealed on Sunday, 23 April 2017 as early as 20 hours, so there could be a significant gap in a high volatility at the opening. From Monday 24 to Wednesday 26, the constitutional Council shall proceed with the centralization and verification of results. It will be proclaimed officially on April 26. The same operations will take place in the aftermath of the second round, which will be held on Sunday 7 may 2017. So pay attention to the results as well as to different financial markets discussed above.
 

Leave a Reply