Frexit or Status Quo? France Heads to the Polls

Below is the CAC 40, the iShares MSCI France (EWQ), and EWQ divided by SPDR Gold Shares (GLD). Things were worse for France at the last election and voters changed course, choosing Hollande over Sarkozy. If the euro is a better measure of the mood at the moment, then perhaps anything really is possible on Sunday. As for the odds, Le Pen looks expensive at 32 cents (PredictIt). Brexit broke the mold of voters getting cold feet at the last moment. No Western European continental country has broken with the established political order yet.

I watched one of the debates, but otherwise haven't paid close attention to the race. Macron strikes me as the French version of Matteo Renzi, the only attraction he has is his youth. A status-quo agenda in a new suit. Markets are betting he wins. If round two is Le Pen/Melenchon or Fillon/Melenchon, the euro could be in trouble. The risk to financial markets is much larger than from Brexit because the UK was not in the Eurozone.

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