Daily Brief – First Round Voting

Charles Porter
Tue 2 Jul 2024

First Round Voting

The first round of voting in the French general elections has passed. With it, a composed market has had a chance to analyse the prospect it once feared above all others in French politics: a possible win for the National Rally. However, with the Euro gaining ground and no sign of a major tantrum within markets – was the prospect of a majority for the far-right populists over played? Let’s look at the results first. Marine Le Pen’s national rally and its allies secured around one third of the vote. In a system of proportional representation this gave them the largest voting share by some margin. 

Still, their share of the vote was not enough to project them an absolute majority in parliament for the second round ahead. Prior to the second round of voting that will take place on the 7th July, candidates that came out third or lower within their constituencies will likely withdraw their candidacy and endorse other parties. This endorsement doesn’t automatically gift their vote to an alternative candidate, but it does ordinarily have a significant sway on voting patterns. The deadline for candidates to withdraw and endorse an opponent is today at 6pm. The political jockeying for position is key to the outcome of the election. So far, unsurprisingly, endorsements for Marine Le Pen’s far right alliance have been few and far between from seceding candidates. Centrist and far-left candidates have been far more favourable to each other.

In all, so far it is too soon to tell what the outcome of the election will be. The outperformance of the National Rally at the ballot does raise their prospect of an outright majority in parliament. However, this still remains a long shot. Based on the Euro’s consolidation, albeit from a heavily discounted position yesterday, some political risk premium has been priced out from the Euro. However, the risk of the French election to the Euro and markets is not yet over. 

Discussion and Analysis by Charles Porter

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