LONDON, April 11 Japanese bank Nomura said on
Tuesday it would enter an "outright short" position to bet
against French government bonds if far-left candidate Jean-Luc
Melenchon were to face the far-right Marine Le Pen in France's
presidential run-off next month.
"If Jean-Luc Melenchon were to face Marine Le Pen, we would
enter an outright short OAT (French government bond position),"
Nomura strategist Jordan Rochester wrote in a note to clients.
"In contrast, if Le Pen does not make it to the second
round, we think demand for OATs will pick up again as the market
fades a 'euro break-up story' and re-focuses on ECB (European
Central Bank) normalisation."
A slew of opinion polls have shown Melenchon - who, like Le
Pen, wants a referendum on EU membership - surging in recent
days, with an Ifop survey on Tuesday putting him in third place
ahead of the conservative Francois Fillon.
Japanese investors dumped a record amount of French bonds in
February, data from Japan's Ministry of Finance showed on
(Reporting by John Geddie; Editing by Jemima Kelly)