Here Are The Best Hedges Against A Le Pen Victory

On Friday, after it emerged that as part of Marine Le Pen’s strategic vision for France, should she win, is a return to the French franc as well as redenomination of some 1.7 billion in French (non-international law) bonds, both rating agencies and economists sounded the alarm, warning it would “amount to the largest sovereign default on record, nearly 10 times larger than the 200bn Greek debt restructuring in 2012, threatening chaos to the world financial system on top of the collapse of the single currency.”
This morning, Bank of France Governor Francois Villeroy de Galhau doubled down on the warning and cautioned French voters about the costs of withdrawing from the euro, noting that local interest rates are already rising on concerns about this year’s presidential election. ‘The recent increase in French rates – which I believe is temporary – corresponds to a certain worry about the exit from the euro,’ Villeroy de Galhau said Monday on France Inter radio.
As of Monday, Le Pen has the support of about 26% of the electorate for the first round of voting in April, compared with 20.5% for independent Emmanuel Macron and 17.5 percent for Republican Francois Fillon, according to the latest Ifop daily rolling poll. Yet while according to polls, both Macron and Fillon would defeat Le Pen in the second round vote, nervousness about poll accuracy – especially after Brexit and Trump – persists.

This post was published at Zero Hedge on Feb 13, 2017.