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International headlines are coming out of France this morning after Marine Le Pen and Jordan Bardella’s National Rally scored a victory in the first round of legislative elections. The party and its allies were projected to have won 33% of the vote, compared to the 29% of the New Popular Front coalition and a distant third-place finish for President Macron’s Renaissance party at 22%. Macron previously called the snap elections after getting trounced in EU parliamentary elections a month ago, but the gamble on a moment of “clarification” seems to have backfired.
Market moves: French stocks soared at the open, with the blue-chip CAC 40 Index advancing nearly 3% in early trade. Some analysts attributed the move to the likelihood of a hung parliament, and a sense of gridlock certainty that will be enjoyed by the market, while others highlighted the potential for growth under National Rally, which has pitched lowering income tax and VAT on energy and fuel. The euro also climbed 0.5% against the dollar to $1.077, while the yield on the French 10-year government bond rose 4 basis points to 3.33%.
Thought bubble: While many media outlets currently use adjectives like the far-right, many French voters believe the opposite – mirroring a stance seen across Europe and even the U.S. They feel that the values now embraced by the so-called centrist parties embody the extremes previously seen on the periphery of the political spectrum, such as open immigration and asylum (European migrant crisis), top-heavy mandates and regulation (COVID pandemic), and military interventionism (sending troops to Ukraine). These voters are also discontent with personalities that seem to leave certain demographics behind (farmer protests) and politicians that are disconnected from the realities of the common man or woman (Yellow Vest protests). The outlook can become even more emboldened when unbridled pluralism is preached over a proud national identity, or in response to entities that refer to these feelings as populist anger, fringe stances and Euroscepticism.
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