Francesco Garzarelli is Goldman Sachs' co-Head of Global Macro & Markets Research
Says an (admittedly against the odds) Le Pen win would be significant, a strike against the euro:
- Expectations of reintroduction of national currencies would rise
- Market dislocations could potentially emerge (primarily in EMU sovereign bonds)
- Bank and international spillovers would likely follow
But, so far the overall market response so far has "been remarkably orderly and, overall, quite muted"
- So far there is also little evidence of systemic risk
The relative calm could be related to European economic growth starting to pick up, and the economic outlook for the region is more positive than it was a year ago
