BAML Says Use Bank SWAPS To Hedge Populist Movement In EU

After being badly burnt by surprise Populist Movement election outcomes of Brexit and Donald Trump, and with another populist victor in the Italian constitutional election in mind, European markets are wary ahead of the April 23 French election. The result could have meaningful consequences for the European Union and the unified euro currency, and thus economic stability. A February 10 Bank of America Merrill Lynch report considers the election that is a short two months away, attempts to handicap the outcome as well as engaging in the one activity risk managers know for certain: they recommend hedges just in case. The subtext of the message: at this point in history, outcomes are becoming less certain so consider subtle methods...