French business confidence stabilises ahead of election

France’s bond market maybe have got the jitters in the run up to the country’s April and May elections but business confidence in Europe’s largest economy remains largely untroubled by political nerves.

A measure of sentiment in the private sector collected by stats agency Insee held at 103 in February for the second consecutive month and just a slight dip from the five-year high of 105 hit in December.

Investors have been dumping French government bonds in recent weeks as polls indicate a steadily rising support for far-right candidate Marine Le Pen who is vowing to take the country out of the eurozone.

Ms Le Pen is expected to triumph in the first round vote but lose out to whoever she faces in May’s final round.

However, polls this week have shown small swings in her favour as her main opponents battle embezzlement scandals and mull over potential alliances to keep her out of the Eylsee palace.

February’s survey remained above its long-term average of 100 and showed a small dip in the ‘general outlook’ indicator which lost 2 points. Confidence in the manufacturing sector gained one point to 107.

A separate survey of France’s private sector this month reported its best month of activity in nearly three years, according to compilers IHS Markit.

In the latest twist in the country’s already unpredictable election race, centrist candidate François Bayrou announced he would not stand and throw his support behind fellow centre candidate Emmanuel Macron.

The boost for Mr Macron helped France’s 10-year bonds snap a three-day losing streak yesterday.