Emmanuel Macron on course for massive mandate for reform agenda

French President Emmanuel Macron will win a crushing majority in Parliament in a week’s time, according to projections from his En Marche party’s first-round victory last night.

If confirmed in the final round next Sunday the poll would give Macron a huge mandate to reform the French economy, as well as strengthening his hand in European diplomacy.

La Republique en Marche won 32.32 per cent of the vote with the votes of allies the Mouvement Democrate (MoDem) included.

Under France’s two-round parliamentary electoral system this would translate into a landslide for a party formed little more than a year ago by a leader who had never won elected office before, according to projections by pollsters Ipsos and Sopra Steria.

Macron’s party could win as many as 455 out of 577 deputies. The lower bound of the projections shows a still-enormous majority, with 415 seats, ensuring a strong hand for the new President.

Emily Nichol, an economist at Daiwa Capital Markets, said: “While we should still expect Macron’s labour market reforms to face opposition from the unions and other usual suspects, their parliamentary passage should be assured.”

The elections also mark another low point for former rulers the Socialist party. The left-wing party last led by previous President Francois Hollande saw its vote collapse to only 7.44 per cent, after Macron’s left-of-centre party swept up its traditional base.

The Socialist party will win only 30 seats, with the party’s presidential candidate Benoit Hamon already eliminated.

The right-wing Republican party, which only at the start of this year had seemed on course to win the Presidency under Francois Fillon, will be almost certainly be the main opposition, with between 70 and 110 seats according to Ipsos projections.

The euro gained around 0.16 per cent against the dollar as currency markets reopened after the weekend, although Macron’s strong showing in the election had already been reflected in polls before the first round.

Kathleen Brooks, research director at City Index, said: “The euro is starting to look strong and stable: it has growth, subdued political risk, and a potential wavering European Central Bank on its side.

“This could be a good summer for the euro at the expense of the dollar and the pound. It looks increasingly like Europe has its house in order, and the Anglo-US world order looks like it is heading for the cliff edge.”

The spread between French and German 10-year bond yields narrowed to 36.5 basis points, its lowest since Macron’s victory in the Presidential election in May, as demand for French government debt rose.

The spread, the premium investors are willing to pay for German bonds, indicates investor perceptions of France-specific political risk. The likely strong majority for Macron pushed yields down by four basis points on Monday as stronger demand pushed up prices.

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