Markets may tell who wins in France

3 things to watch as Macron, Le Pen go down to the wire

Forget the pollsters. Put down the newspaper. Clues that will reveal who the next French president will likely be can be found in plain sight in financial markets.

European political risk has been one of the biggest market worries in 2017. The reason? Investors remember the unexpected “Brexit” vote last June and President Trump’s surprise win in November.

Now they fear Marine Le Pen, the far-right finalist and anti-euro firebrand, will upset Emmanuel Macron, the centrist front-runner and backer of a united Europe, and become president of France.

The final round of the Macron vs. Le Pen vote is Sunday, with Macron leading by a roughly 60% to 40% margin, according to polls.

Investors in search of a proxy for betting on the outcome of the election — or those who just want to get a good read on which candidate is likely to win — need to keep an eye on a fund that tracks the French stock market, the euro currency and a broad European stock index.

Here are three investments to watch:

iShares MSCI France ETF (EWQ). This fund, which is up nearly 18% this year, tracks the broad French stock market and includes blue-chip names such as Loreal and Airbus.

“It’s the ETF to watch during the French Election,” notes Josh Selway, an analyst at Schaeffer’s Investment Research. If Macron, who is viewed as far more marketfriendly than LePen, holds his lead, French stocks should rally as political fears fade.

The euro currency. Europe’s common currency should also get a lift if Macron defeats Le Pen, as it will send a message of European political and economic stability.

Stoxx Euro 600 Index. (SXXP) This is a broad index of European stocks from 16 different countries, including France, Italy, Germany Switzerland and Belgium. It has rallied nearly 4% as investors’ bet on a Macron win, less political upheaval and improving business conditions in the eurozone.