France's presidential election is rapidly approaching, and Goldman Sachs is telling investors to stay cautious.
The investment banking giant recommended Monday that investors short French bond futures expiring in June ahead of the contest, amid the possibility that anti-establishment candidate Marine Le Pen or Jean-Luc Melenchon could stun pollsters with a win.
Political polling recently has been a terrible predictor of actual election results, internationally. Polls heading into last year's Brexit vote and the U.S. presidential election were mostly wrong, causing shockwaves across financial markets.
In France, investors predict that a Le Pen or Melenchon victory would likewise send markets into a frenzy.
"We would expect French bond spreads (and yields) to come under upward pressure if the first round of the Presidential election were to result in a strong showing of anti-establishment parties," Goldman said in a note to clients.