The first results are in and according to IPSOS exit polls, Macron leads with 23.7% of the vote, Le Pen is second with 21.7%, with Fillon and Mellenchon tied for third at 19.5%. However, according to official results, from the French interior ministry, Le Pen is leading with 24.3% of the vote, Macron is at 21.4%, while Fillon has 20.3%.
Meanwhile, according to French official data:
LE PEN GETS 24.2% IN FRENCH INTERIOR MINISTRY PRELIMINARY COUNT
MACRON GETS 21.4% IN FRENCH INTERIOR MINISTRY PRELIMINARY
And an update:
LE PEN AT 24.9%, MACRON AT 21.1%: INTERIOR MINISTRY AT 8:13PM
FILLON AT 20%, MELENCHON AT 18%%: INTERIOR MINISTRY AT 8:13PM
FRENCH INTERIOR MINISTRY 8:13PM DATA BASED ON 5.25M VOTERS
Elsewhere, Benoit Hamon, the candidate for the incumbent Parti Socialiste of Francois Hollande, has just conceded defeat after a dismal showing of around 6%. He spoke to supporters and the press in a packed out hall and made an instantaneous endorsement for Emmanuel Macron.
HAMON SAYS ENDORSES MACRON TO BEAT LE PEN IN SECOND ROUND: BBG
While we urge taking early polls with a big grain of salt, according to a Harris poll, Macron is in the lead with 24.5% of the vote, follow by Melenchon and Le Pen in second place with 20% of the vote.
Ahead of Sunday’s first round of the French election, we have previously provided several perspectives on the political and economic outcomes, including a permutation matrix of all six possible outcomes in terms of “high” vs “low market risk” (from BofA), why the market may be too complacent about a Le Pen – Melenchon result (candidate approval variance is within the polling error), and that European stocks have completely failed to price in any adverse outcome (as DB observed yesterday).
So with markets now closed, and all bets off, if only for the next two days until the results emerge, here is a complete guide to the first round of the first elections, compiled based on research reports by Deutsche Bank and Citigroup.
Guide to the French elections first round, from Deutsche Bank and Citi
The first round of the French Presidential elections will be held on Sunday 23rd April.
Most polling stations will close at 7pm local time but some will remain open until 8pm local time. The first exit polls should be published at 8pm but may have to be taken cautiously. By midnight local time we could expect to have a clear picture of who would make it to the second round.
Since publication of our initial comprehensive piece on the French elections, the polls for the four major candidates have narrowed considerably and Mélenchon has replaced Hamon on the left wing. The narrowing of the polls and the historical error in actual voting relative to polls makes any of the six outcomes involving the four major candidates possible.
In order of decreasing likelihood the potential outcomes are (1) Macron vs. Le Pen (2) Le Pen vs. Fillon (3) Macron vs. Mélenchon (4) Le Pen vs. Mélenchon (5) Macron vs. Fillon and (6) Mélenchon vs. Fillon.
Based on current polls, in our baseline scenario of Macron vs. Le Pen in the second, Macron is expected to win comfortably. Le Pen would have to win the first round with a gap of 5pp or more and/or the participation rate in the second round to fall below 60% for her chances to improve significantly.
We assess the expect market impact on bond markets based on expected yield and spread levels for a presidential win for the four candidates and indicative probabilities of a win for the candidates in the second round conditional on the outcome of the first round.
Macron is favoured to win against all candidates if he makes it to the second round. Based on current polls market concerns about French elections should recede considerably in any outcome with Macron in the second round.
OAT-Bund spreads have the greatest room to widen in case of a Mélenchon vs. Le Pen outcome, while it has the most room to tighten in case of a Macron vs. Fillon outcome. However, in the latter scenario the tightening in OAT-Bund spreads should be more than offset by the rise in Bund yields leaving OAT yields broadly unchanged.
Despite leading in the polls for Round One, The Express reports that a monumental computer blunder could cost Marine Le Pen the French general election as 500,000 citizens living outside of France have the chance to vote twice.
The election has become extremely close with just 4.5 percentage points separating Macron, Fillon, Mélenchon, and Le Pen…
Which is why this shocking error in election procedures could be the swing to crush Le Pen’s hopes. As The Express reports, half a million people received duplicate polling cards in the post, which would allow them to cast two votes at the first round of the election, held on April 23.
French authorities confirmed they would not be investigating the potential electoral fraud until AFTER the election, when retrospective prosecution may take place.
We are sure this is a simple ‘accident’, but coincidentally (for the establishment), this could crush Ms Le Pen’s dreams of surging to power, as most French nationals living outside of their country are not right wing – demonstrated by the fact many feel they depend on the European Union (EU) to guarantee their stay in foreign countries. Far left candidate Jean-Luc Melenchon, who has surged in the polls recently and threatens to break into the leadership race against Ms Le Pen and Mr Macron, could also benefit from this catastrophic error.
The premium investors are demanding to hold French over German 10-year debt has hit a fresh post-eurozone crisis high today – exceeding 0.81 percentage points for the first time since August 2012.
The yield gap has swollen to its highest in over four years this month, reflecting investor jitters about France’s upcoming and unpredictable presidential elections in three months’ time.
France’s 10-year bond yield – which reflects the government’s borrowing costs – leapt 7 basis points today to 1.1 per cent after latest polls show the far-right Marine Le Pen is on course to emerge as a clear winner in the first round vote held in late April.
Ms Le Pen, who has promised to hold a referendum on France’s eurozone membership, is polling at 27 per cent in the first round vote, with her two main rivals, Francois Fillon and Emmanuel Macron tied at 20 per cent, according to latest collated polls from Opinionlab.
The prospect of a Le Pen presidency has spooked French bond investors with markets warily eyeing the apparent demise of her biggest rival, the right-wing Mr Fillon.
A payout of more than 100 million euros ($106 million) may be beckoning for options investors if the German 10-year yield drops to zero in the aftermath of France’s elections.
German 10-year bunds currently yield about 0.30 percent, so a decline to zero would represent a significant increase in demand for haven assets. That would mirror moves seen after the U.K.’s Brexit vote.
As Le Pen’s odds of victory in the French elections rises, so the spread between ‘risky’ France and ‘safe-haven’ Germany has soared…
As 2016 draws to a close, a sense of unease is gripping many commentators as they look ahead. This year brought victories for Brexit and Donald Trump. The outcome of both votes were largely unexpected. What will 2017 bring? The EU is facing three, or even four, elections in major member states. The Netherlands, France, Germany and possibly also Italy will go to the polls. The outcome in all four elections is far from certain at this stage. Indeed, voting behavior seems to have become difficult to predict.
Economic and sociological research points to a number of different factors provoking these recent results. The debate is broadly about whether it is economic issues such as income inequality, cultural issues such as a rejection of equal rights for women, minorities and gay people, or factors relating to citizens’ perceived loss of control over their destiny that has driven people to support populist candidates and causes.
At first sight, the economic factors seem to have played a strong role. The vote for Brexit predominantly came from the countryside, where GDP per capita levels are significantly lower than in the cities. Moreover, income inequality levels are much higher in the United States and the U.K. than in continental Europe. And indeed, one can show that the Brexit vote is significantly affected by regional income inequality though the effect may not be very large.
The second explanation is a rejection of progressive cultural norms. An interesting study by Ingelhart and Norris emphasizes very much this aspect. They offer evidence that the recent protest votes are a cultural backlash against progressive values. And indeed, discourse especially on social media has totally changed. Unfortunately, it seems to have become widely acceptable to talk of white supremacy and engage in racist discourse.
On Wednesday night, controversial filmmaker Michael Moore made yet another mind-numbing prediction: He strongly suggested to late-night talk show host Seth Meyers that the Electoral College would deny President-elect Donald Trump a victory prior to his January 20th, 2017 inauguration. Moore previously stunned everyone by predicting Trump’s victory at a time when the analytics — and the political-media establishment — all favored Hillary Clinton.
There is a mechanism for what Moore is suggesting, however unlikely, and it exists within the Electoral College itself in the form of a decentralized, existential bunch of wonks. And, historically speaking, they have never actually asserted their power and changed a presidential election. They’re called ‘faithless electors,’ people nominated to represent the will of the people but who may, constitutionally speaking, revoke their duties. So far, there are seven ‘faithless electors’ who have defected from voting for Trump in the Electoral College. Count ‘em, seven — out of 270. That’s not a lot, obviously, but the mind balks at how quickly momentum could swing against a candidate that garnered over 2.5 million fewer votes than his challenger in the popular vote.
Here are three reasons why I believe Trump could, incredibly, still lose this election:
Trump has revealed himself to be fully in support of the establishment.
With his selections for pretty much the full gamut of cabinet positions, Trump has revealed himself to be an establishmentfigure, which is exactly the perception he ran against. Will his voters turn against him? Mostly no (or, at least, not yet). Will the other 74.5 percent of Americans who did not support him reject his victory? Possibly. Will this alone cause Trump to end up losing the vaunted Electoral College? No. Of course not! That’s why there are two more reasons.
Hillary won the popular vote by over 2.5 million.
This is fact. The number is actually growing. It’s historic; it’s actually disgusting if one is prone to be disgusted by electoral politics. Will this alone — or in conjunction with reason one — cause Trump to lose? No. Of course not! That’s why there’s one more, important, reason.
When will be know the results of the constitutional referendum?
Here is the quick answer: The voting takes place on Sunday but the polls don’t close until 11 pm local time (5 pm in New York).
After that, the counting will start.
So it won’t likely be until sometime early Monday morning in Italy that we know which side won. I suspect will start to get an idea around 3 hours after the end of voting but it could be significantly later, especially if it’s close.
What’s important to note is that markets will be open when the results hit and that could create a tremendous amount of volatility. Many forex brokers have cut leverage ahead of the result in anticipation of a big move in the euro.
The second event to watch after the results will be the speech from Italian Prime Minister Matteo Renzi. He has said he will resign if he loses. If that takes place immediately after the vote, it willl add to the uncertainty and weigh on the euro.