State Street Comments on the Dutch General Election Result

In reaction to the Dutch General Election result, Michael Metcalfe, global head of macro strategy, for State Street Global Markets, and Antoine Lesné, EMEA head of ETF strategy at SPDR ETFs, part of State Street Global Advisors, offer their views.

Metcalfe commented, “The victory of the People’s Party for Freedom and Democracy (VVD) was in line with the most recent polling. As is often the case the popularity of the more radical, Party for Freedom (PVV) slipped as the election approached. This highlights polls do not always or systematically underestimate the populist vote as arguably they did in the case of Brexit or Trump. While a potential market moving result has been avoided, there had been few signs of disruption in Dutch financial assets prior to the vote, which suggests any relief rally will be equally modest.”

Lesné commented, “The VVD lead had started to gain momentum in the few days leading to the election. While polls for the traditional Christian Democrats (CDA) had slipped a bit, the approvals of the ‘populist’ anti-Euro Party for Freedom (PVV) were also losing steam. With the VVD the largest party, it may be easier to build a governing coalition with four or five parties and gain a 76 seat majority. The PVV may likely remain the opposition party. Meanwhile French Government Bond (OATs Obligations Assimilables du Trésor) spreads may tighten a bit as the Dutch elections have been eagerly awaited to serve as a potential temperature check for French elections. One obstacle has been passed and attention now focuses on the French elections and the concerns about the growing popularity of the National Front of Marine Le Pen.”