Goldman Sachs's opinion on the French elections

France's presidential election is rapidly approaching, and Goldman Sachs is telling investors to stay cautious.

The investment banking giant recommended Monday that investors short French bond futures expiring in June ahead of the contest, amid the possibility that anti-establishment candidate Marine Le Pen or Jean-Luc Melenchon could stun pollsters with a win.

Political polling recently has been a terrible predictor of actual election results, internationally. Polls heading into last year's Brexit vote and the U.S. presidential election were mostly wrong, causing shockwaves across financial markets.

In France, investors predict that a Le Pen or Melenchon victory would likewise send markets into a frenzy.

Le Pen has said repeatedly that France would leave the European Union under her leadership, while Melenchon has said he would pull the country out of NATO.

French bond yields rose Monday, creating a spread between themselves and more steady German bond yields that is at its highest point since late February.

Most polls show Le Pen and conservative Emmanuel Macron as the favorites to win the first round of the election on April 23, while Macron is expected to easily win in the May 7 runoff. France's presidential elections are held in two rounds.

Source CNBC

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