France: Reasons to be bullish despite election stress

If financial markets are a guide, France is facing a perilous period of turbulence and uncertainty as the presidential election nears. But the underlying economy is telling a different story. While France’s bond yields have spiked and its stocks have trailed the rest of the euro zone, as investors run scared of political risk, the country’s economic prospects are actually looking up.

French business confidence, consumer confidence and job creation are surging, while earnings expectations for big French companies are also improving.

Whoever wins May’s election – whether it be conservative Francois Fillon, far-right leader Marine Le Pen or centrist Emmanuel Macron – will start their five-year term with hiring at a decade high and the sluggish economy finally strengthening.

Official data this month also showed the economy created jobs in the fourth quarter at the fastest pace in a decade thanks to the services sector, which is by far the biggest sector in France.

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