Goldman: Globalization Will Prevail, Macron To Beat Le Pen Handily

What with Monday’s furious risk rally, it would be easy to forget that Emmanuel Macron still has to actually win the French election.

To be sure, the pollsters (who are riding higher than a coked out EUR spec on Monday) have already called the runoff for Macron and that’s precisely why you’re seeing what you’re seeing across markets.

Is it likely that Le Pen can pull off the upset? No. Is it possible? Well, yes. Anything’s possible.

But for those interested to know if the longs you put on this morning are likely to be undercut by a close encounter of the populist kind next month, Goldman has some reassuring words of wisdom. Read below as the bank explains why Macron is likely to cruise on May 7.

Via Goldman

Mr. Macron likely to win second round run-off. A number of observations can be made from yesterday’s results of the first round of the Presidential election.

The populist pull in France is likely to persist in the future.

  • Although Ms. Le Pen’s realised vote share represented an underperformance relative to the opinion polls taken just ahead of the first round, she beat her (and her father Jean-Marie Le Pen’s) previous vote share in presidential elections (as well as the number of votes cast for the FN in the December 2015 regional elections.
  • Ms. Le Pen came first in about 18,000 municipalities (around 50% of total), mostly those distant from large cities, where the municipal economic mass is low and ‘sociocultural heterogeneity’ is high and with greater ‘cultural homogeneity’.

Mr. Macron will have the support of the ‘front républicain’ in the second round. Although Mr. Macron led Ms. Le Pen by less than a million votes, ahead of the second round he has already received official indication of support from both the centre-right candidate François Fillon and the Socialist candidate Benoît Hamon, who together won 9.3 million of votes in the first round.

Prior to the outcome of the first round, polls indicated that Mr. Macron had a 25pp lead over Ms. Le Pen in a run-off between the two, which increased yesterday to 28pp. But voting intentions may evolve: reflecting France’s ongoing political realignment between mainstream pro-European and populist Eurosceptic voters, we can expect the gap in polling between the two candidates to narrow in the run-up to the second round.

Nevertheless, given that (1) mainstream supporters are likely to present a broad united front against the FN in the run-off (dubbed the “front républicain”), as already highlighted by the support expressed by Mr. Fillon and Mr. Hamon in favour of Mr. Macron, and that (2) left-wing populist supporters are unlikely to cast a vote for the FN because of its perceived far-right extremism, we think it likely that Mr. Macron will win the French Presidency in two weeks’ time.

This view is currently supported by the latest opinion polls (carried out after the outcome of yesterday first-round election), which suggests a victory for Mr. Macron against Ms. Le Pen with between 62% and 64% of votes cast (Exhibit 2).


The two candidates will take part in a televised debate on 3 May Today, Mr. Macron and Ms. Le Pen have resumed their campaigns. Two themes are likely to continue to dominate the campaign.

  • Globalisation vs. protectionism. Following the first-round outcome, the Le Pen camp have claimed that the second round of the election will represent a choice between Mr. Macron’s pro-globalisation agenda and their candidates more protectionist stance. Ms. Le Pen proposes the cancellation of existing free-trade agreements and opposes future ones.
  • More or less Europe. Ms. Le Pen’s camp has also intensified the nationalist tone they have adopted with respect to European issues, arguing that voters will have to decide between (1) further European integration – notably Mr. Macron’s proposals for a European budget and Euro area Finance minister – and (2) a return of economic sovereignty to the national level.

A televised debate between Mr. Macron and Ms. Le Pen is scheduled for 3 May (9pm Paris time), where these issues are likely to take centre stage.


Speak On It