The French will go to the polls this weekend to pick their new president, and the world will be watching to see just how far the populist wave could repeat the Brexit scenario. But should the next French president, Macron or Le Pen, cause you to deviate from your investment strategy?
Swissquote Bank suggests ‘yes’ and that investors should tweak their investments accordingly, even if financial markets have so far been impervious.
The Swiss online bank will share some ideas on the prospects for different sectors under the presidency of the two nominees who headed to the May 7 runoff vote. The new offering allows its clients to invest in a selection of stocks or currencies which are most likely to be affected by a victory from either candidate.
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Forays into different scenarios
With both candidates have made commitments that could reshape financial markets, two different portfolios of stocks have been put together that will likely benefit from a Macron or Le Pen victory.
While in many respects Emmanuel Macron is perceived as the candidate of the status quo, Swissquote has selected stocks that could benefit from his support for stronger European integration, and openness to international trade. As such, Macron’s victory would strengthen euro, and relatively weakens U.S. dollar and Swiss franc.
By contrast, the broad consensus is that Marine Le Pen would be a negative for riskier assets, therefore Swissquote said it would likely hurt the single currency and trigger declines among French and German stock markets, whilst lifts the Swiss franc.
The company will use a predictive analytics tool, which was developed in partnership with Ecole polytechnique federale de Lausanne (EPFL), to track public opinion across the web to predict the outcome of the elections in real-time. The new tool uses different artificial intelligence algorithms, such as graph analysis, natural language processing and deep machine learning, to provide a poll based on nationwide online US sentiment.
Meanwhile, given their strong sensitivity to changes in the political outlook, Swissquote has created different France’s election forex baskets which feature several currency pairs that are increasingly correlated to poll results.