At Any Rate cover image

At Any Rate

Global Rates & Economics: State of play after the first round of the French election, UK election update

Jul 2, 2024
Global rates and economics experts Francis Diamond, Raphael Brun-Aguerre, and Aditya Chordia discuss the French election's first round impact on markets, potential outcomes for the second round, implications for European fixed income markets, and a brief look at the upcoming UK general election.
21:50

Podcast summary created with Snipd AI

Quick takeaways

  • After the French election, markets showed a risk-on move and spread tightening in French bonds, reflecting reduced tail risk scenarios and clearer potential outcomes.
  • The upcoming UK election is expected to result in a Labour win with minimal fiscal changes, focusing on longer-term implications of Labour's fiscal stance on growth and fiscal headroom.

Deep dives

French Election First Round Results and Potential Outcomes

Following the first round of the French election, key results included Marine Le Pen's party leading with 33% of the votes, a left alliance at 28%, and Macron's party in third. The upcoming second round involves strategy shifts, with party leaders urging weaker candidates to step down to hinder Le Pen's success. Potential outcomes range from Le Pen gaining a majority to a workable or weak relative majority that impacts legislative efficiency and governance stability.

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