Banks: Le Pen win won't be enough to break up Euro - Bloomberg

Analysts at Tier 1 banks were on the wires, via Bloomberg, as they do not expect the outcome of France's  presidential election to trigger any 'Frexit' nor major threat to the shared currency. 

Key Highlights:

•The chances of anti-euro candidate Marine Le Pen winning the second round on May 7 are slim and even if she does. Without strong support in Parliament, her ability to push for a referendum on the country’s membership in the currency union will be limited.

•A Le Pen victory can’t be ruled out and would spark a capital flight from France and peripheral euro nations such as Italy.

Bloomberg's compilation of Tier 1 banks' views:

•Still, a victory for Le Pen shouldn’t automatically translate into a French exit from the euro zone. “An exit would be a long and complex process” as it would require a constitutional amendment, Valentin Marinov, London-based strategist at Credit Agricole SA.

•“In any case, her party is extremely unlikely to come remotely close to an absolute majority in the lower house in the June general elections. She would have to accept cohabitation and thus would not be able to govern strictly following her manifesto,” Francois Cabau, economist at Barclays Plc.

•“A victory of Le Pen in the presidential election would probably lead France to leave the EMU. And without the political and economic heavyweight France, the rest of EMU is unlikely to survive," Joerg Kraemer, Frankfurt-based economist at Commerzbank AG.

"The probability of the election of Le Pen as president, while low, cannot be fully ruled out yet. Again, she will probably be forced into a period of cohabitation which would make it hard for her to call a referendum on France’s EU membership and the matter may end up being decided by the courts," Andrew Cates, economist at Nomura Holdings Inc.

Meanwhile, the EUR/USD pair seems to continue under short-sellers' control as long as prices trade below the 100-DMA near 1.0780 handle.