Even Le Pen and Melenchon both making it to the second round will not spell "end of the world"

Earlier today we sent out a note to our clients, highlighting that the real risk to the French elections is no longer Mrs. Le Pen making it to the second round (a likely event), but rather Mr. Melenchon doing just that (a less likely event). This is so because in any second round, Mr. Melenchon has a realistic probability of carrying the day, unlike Mrs. Le Pen. This means that if today the unexpected happens, i.e. Mr. Melenchon makes it to the second round (with or without Mrs. Le Pen), we could see tomorrow some major market disruptions. We also argue, however, that any non-establishment presidency (whether it will be Le Pen or Melenchon) would have a hard time pursuing a policy that would effectively lead to Frexit (which in and by itself would be the nail in the coffin of the EU project). As a result any market correction because of Mr. Melenchon making it to the May 7 runoff, should be seen as a potential buying opportunity.