The prospect of a Le Pen victory in May remains negligible. However, the political events of 2016 have instilled a note of caution in markets. Rising French government bond yields reflect the threat of a Front National victory.
Nevertheless, ECB tapering will force investors to reassess not only country-specific risks, but acknowledge the positives too. France’s nascent technology sector could take off if Mr Macron implements the appropriate reform agenda. The Eurozone recovery could accelerate despite the political turbulence.
The jump in Apple’s share price reflects strong growth prospects for the global economy as well as the ability of tech companies to generate new sources of revenue. Deregulation and tax reform are also outweighing the potential negatives from Mr Trump’s hard-line stance on immigration. There are significant opportunities in the European technology sector too.
Summary
- French election risks loom
- But Eurozone recovery can endure despite politics
- Indeed, opportunities in European tech will support stronger growth in 2017
