There’s been no shortage of warnings from analysts, economists, and political scientists (you know, Taleb’s “pseudo-experts” who know nothing) regarding just how traumatic it would be both for financial markets and for the EU in general were Marine Le Pen to pull a (populist) rabbit of her hat and win the French presidency.
But is that “tail risk” becoming more tail risk-ish (i.e. less probable)?
According to credit markets, the answer would appear to be “yes”, as French CDS is now trading below 50bps for the first time since mid-February:
And it’s the same story with OATs:
Meanwhile, in the latest rolling daily poll from Ifop:
- Macron Would Beat Le Pen 60%-40% in 2nd Round: Daily Ifop Poll
- Emmanuel Macron 25.5%
- Marine Le Pen 25%
- Francois Fillon 17.5%
- Benoit Hamon 10.5%
- Jean-Luc Melenchon 14%