Spotlight: European elections

Key points

• Elections in the Netherlands, France and Germany look highly uncertain and could interfere with the ongoing recovery scenario in place. 
   
• The future of the Eurozone is heavily dependent on the results of these elections, particularly from the outcome of the election in France. 
   
• European markets have not priced the extreme scenario of a “Frexit” – France leaving the Eurozone. 
   
• Impacts from politics on European assets could be asymmetrical: potential heavy losses in case of extreme political scenario versus a modest rebound in case of a “pro-European” outcome from the elections.