In the latest political twist in the French presidential race, AFP has reported that recent French presidential frontrunner Francois Fillon, who has been embroiled in a major graft scandal, will hold a press conference at 4 p.m. at his campaign headquarters in Paris, at which many traders are expecting he will announce that he is stepping down, although according to subsequent Reuters reports Fillon may launch a "fightback" against the fake job scandal that has sent his standing in the polls crashing
"Counter-attack," a Reuters source said in a text message. Fillon "plans to tell the truth to the French people", when he speaks at his campaign headquarters at 4 pm. Fillon has come under mounting pressure to quit the race over the past fortnight since a newspaper alleged his wife was paid hundreds of thousands of euros in state money for work she may never have done. Even some senior members of his own party have told him to stand aside for someone else in time to build a campaign for a vote that is now just 11 weeks away.
It has been a humiliating reversal of fortune for Fillon, a devout Catholic and father of five children, who had campaigned on the basis that he is a rare honest politician.
The accusations also sit uncomfortably with his economic plans for setting France back on to its feet include slashing public spending and sacking half a million public servants.
Since the scandal broke, he and his wife have been interviewed by the fraud police, his office in parliament has been searched, and the inquiry has now been extended to two of his grown-up children.
Opinion polls show the 62 year-old former prime minister has lost his status as favorite to win the presidency to independent centrist Emmanuel Macron, and that far-right leader Marine Le Pen has also gained ground. Fillon said at the weekend he would fight to the end to defend his position as the party's nominee. If he is forced to quit as the center-right's nominee, it would be unprecedented in six decades of French politics. The stakes are high for France's Right, which had looked likely to return to power after five years of Socialist rule under President Francois Hollande.
No matter what Fillon has planned, however, investors in French bonds are not sticking around, and as the chart below shows, the spread between French and German bonds has blown out to 71bps, the widest since 2013. Meanwhile, Bund futures and volumes spike with around 8.5k trading in 1 minute between 162.98/163.04 as resistance is broken, with fast money buying driving the move, said one trader in Europe quoted by Bloomberg, sending the German 10Y yield sliding below 0.38%, as the curve flattens with 5s30s erasing earlier steepening.
Separately on Monday, Alain Juppe, another former prime minister seen as a potential stand-in for Fillon, ruled out a comeback. "No is no," Juppe said in a tweet. "I'll say why. Today let's listen to FF (Fillon), our candidate." Fillon's camp on Saturday distributed 3 million leaflets entitled "Stop the Manhunt", painting the scandal as a left-wing conspiracy and declaring: "Enough is enough".
Meanwhile Bloomberg adds that with Fillon’s presidential bid in turmoil, rival candidates stepped in to seize the initiative in the most unpredictable election campaign in decades, and notes that the pollsters’ new favorite, independent Emmanuel Macron, is due to unveil more details of his platform for the presidency at a rally in Paris on Monday evening after hosting a sell-out event in Lyon on Saturday. His main challenger, the National Front’s Marine Le Pen, was also in Lyon at the weekend, where as we reported over the weeked, she unveiled a 144-point program program advocating an exit from the euro zone, a referendum on European Union membership and immigration limits.
Le Pen’s rally in Lyon had elements of U.S. President Donald Trump’s inauguration speech, as she painted a picture of France with its borders undefended and an economy crippled by the euro. “Globalization is my enemy,” Le Pen said Sunday, citing “global finance” and radical Islam as twin culprits. “They will lead to the disappearance of this France as we remember it and as we love it. One advances under the guise of liberal economics, the other under the guise of religious liberty.”
Marion Marechal-Le Pen, Marine’s niece, made an open appeal to Fillon voters at the Lyon rally, telling them to look for “Plan-M,” a play on the much discussed Plan-B for the Republicans to find another candidate. “You have in front of you a candidate who meets all your expectations, be it on taxes, migration, society, and sovereignty.”
As Fillon broke his weekend silence and called a press conference for later on Monday, Benoit Hamon, who was officially sworn in as the ruling Socialist Party’s candidate in Paris, took to the airwaves to build on his recent surge in the polls. “The solution to unemployment is not the ‘Uberization’ of work,” Hamon said on RTL Radio, in a swipe at Macron. “Confronting the challenges of our country involves having a clear vision of our future, not posing as a man sent by providence.”
In the latest polls, the BVA poll put Le Pen on 25 percent and Macron on 21-22 percent in first-round voting intentions, with Fillon scoring 18-20 percent. In the run-off, Macron would defeat Le Pen by 66 percent to 34 percent, the poll found. Another poll released Sunday gave some hope to Fillon, with the Ifop survey in Le Journal du Dimanche showing 64% of supporters in his party want him to stay on. “He retains a majority support on the right,” Ifop Director Frederic Dabi said in a commentary. “His strategy seems to be to mobilize his supporters along the line of ‘you are not going to steal our victory’.”