Goldman Sachs caution clients amid French election

Goldman Sachs has recommended its clients take a short position on French government bond futures maturing in June ahead of two-round presidential elections that begin later this month.

The position would allow investors to take a view on duration in a market that the bank considers expensive, its economists said.

Goldman Sachs economists said the upcoming presidential elections could have an effect on French government bonds. They said a victory by either of the centrists, Francois Fillon or Emmanuel Macron, would see the French government bond yield spread over Germany fall whereas a win for either anti-establishment party — headed by Marine Le Pen and Jean Luc Melenchon — would see the gap increasing.