In the year of elections, two of Europe's three largest economies are heading to the polls,

and investors' reactions couldn't be any more different.

France's upcoming parliamentary elections are wreaking havoc on French stocks and bonds, while UK financial markets have been relatively

stable as the country gears up for its own general election on July 4th.

So what are the markets telling us about the political landscape and are there risks that are being mispriced?

I think the problem with this and the reason that markets are funny, it's so difficult to price

is that there's not a clear path to a great outcome for markets.

I'm Allison Nathan and colleagues in Goldman Sachs research.

Sharon Bell is a senior strategist on the European Portfolio Strategy team and George

Cole is the head of European Rate Strategy in the Global Macro and Markets Research Group.

They're both joining me remotely from London.

Sharon, George, welcome back to the program, great to see you all.

Thank you.

Thanks very much.

So let's start with the French elections, the snap election called by French President

Emmanuel Macron, which will take place on June 30th with a second round on July 7th,

was no doubt a surprise, and I'm not saying it wasn't, but it sent French assets into an absolute tailsmith.

Sharon, why do the markets react so strongly?

You know, I think that there are lots of reasons.

I mean, I probably put them down into four different buckets.

One is the first one which you've already

covered which was a surprise. We've had lots of elections this year but this

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