French Presidential Elections 2017 - Analysts react

"The result is more than a risk avoided. It offers a genuine chance to reform France and strengthen the Eurozone and the EU. Fillon and Hamon immediately endorsed Macron. Fading political risk in France adds to the chance that French and Eurozone growth can surprise to the upside this year. [...] The late surge in support for Melenchon, who espouses the kind of loony left ideas that bankrupted Venezuela, remains scary. It shows that the potential for populist accidents is not confined to the UK (Brexit, Corbyn) and the US (Trump, Sanders)." - Holger Schmieding, Berenberg

"A new dawn for French politics. More generally, this result, in which both candidates of the traditional parties are excluded from the final round, suggests a complete transformation of the French political landscape, possibly along the lines of social conservatism (or not) and economic liberalism (or not) in a more fragmented, but more clearly defined distribution. We think this should also help Macron, if elected President, to form a coherent pro-European, pro market and socially liberal majority in parliament after the June 11 and 18 upcoming parliamentary elections." - Credit Suisse

"What this won’t do is change the political schism that has opened up in France or change the sense of grievance amongst large sections of the French population, nearly 40% of whom voted for a Eurosceptic candidate, while Mrs Le Pen could well also put in a strong showing in the second round. This is likely to mean that Mr Macron won’t be able to deliver anything like what he promised in his manifesto, given he doesn’t have any party machinery or political support in the French parliament, and probably won’t get it either." - Michael Hewson, chief market analyst CMC Markets

"The most likely outcome of the second round vote remains a Macron presidency, which we think would benefit the French economy. His planned labour market reforms would help to boost growth, even if his target of an unemployment rate of 7% by 2022 is very ambitious, given its historical path. And his pro-business stance should support investment. His presidency would also bode well for the EU, perhaps particularly if combined with a Schulz presidency in Germany after September’s election there." - Capital Economics

"The first round of the French Presidential election produced one of the most market-friendly outcomes with centrist Macron (23.8%) leading against the right-wing Le Pen (21.5%). The wide-enough margin allows markets to conclude that concerns Macron may not have the ability to translate support into effective votes may disappear. Before the election it was feared that supporters of extremist candidates would show a higher commitment to vote compared to mainstream candidates." - Morgan Stanley

"Voters yesterday turned their backs on the establishment parties and are looking to Emmanuel Macron and Marine Le Pen to remedy the French malaise. Polls suggest Le Pen is unlikely to convince many Europhile voters to side with her in the second round. A Macron presidency would be positive for growth and the EU. However, sweeping reforms are uncertain under a likely cohabitation after the June parliamentary election." - Oxford Economics

"While it’s clear that populism is growing in the region as it is elsewhere, the victory for Emmanuel Macron in the first round may well have crushed the chances of Marine Le Pen in two weeks’ time. Even when the polls had Le Pen taking the first round, Macron was comfortably expected to win the head to head but with the centrist candidate having toppled her on Sunday, the leader of the National Front would appear to have a monumental job on her hands." - Craig Erlam, senior market analyst at Oanda

"A victory for Le Pen would have been a systemic event and challenging to prepare for. Le Pen will almost certainly be defeated in two weeks time, and equities can continue to rally going into 2018 as non-existential risks can be absorbed. The global economy might not be booming, but growth is returning. [...] There could be more surprises to come in an event-packed European calendar however - UK elections, Greek debt talks, German elections, and the possibility of Italian elections in the not-so-distant future are enough to keep markets busy." - Bill Street, State Street Global Advisors

"Globalisation is under major threat since Brexit and we think this is going to remain the major focus for the second round of elections. Macron will have to work twice as hard to get himself across the line and this is by no mean an easy task, especially in the light of recent terrorist attacks in France. There was a lot of noise that Le Pen was ahead with more significant support but that was a lot to do with rural polling closing before the bigger cities had their say." - Naeem Aslam, chief market analyst at Think Markets

"It remains important for Macron to ensure that enough voters will turn out in two weeks to support him in the second round against Le Pen. Centre-left and centre-right politicians have expressed their support for Macron, but far-left Mélenchon refused to give voting instructions to his electorate. [...] Nevertheless, with the market likely to feel relatively comfortable with the residual risk of a second round contest between Macron and Le Pen, we can start to look beyond France. Italy's election is arguably the next key political event, but that could be more than six months away. In the meantime, we expect the reflation and ECB exit themes to become more established. However, with the French election as yet unfinished, there seems little chance of the ECB surprising with a hawkish press conference on Thursday." - Marc de-Muizon, Mark Wall, Deutsche Bank