Liberté, egalité, anxiété? Investors fret over France
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LIBERTÉ, EGALITÉ, ANXIÉTÉ? INVESTORS FRET OVER FRANCE
Markets love volatility, but tend to dislike the uncertainty that generates it. The upcoming French election is no exception.
The CEO of Paris stock market operator Euronext ENX.PA said today investors are worried by the snap vote this weekend and, specifically, the prospect of a politically extreme party with little or no government experience taking power after the vote.
When President Emmanuel Macron called the election on June 9, it sent shockwaves through French stock and bonds markets and unsettled the euro.
Since then, the premium investors demand to hold French debt rather than benchmark German bonds neared its highest since the euro zone debt crisis of 2012 and is still not far off that point. Paris' CAC 40 .FCHI has lost over 4% in value since then and the euro is down over 1% against the Swiss franc - the classic safe-haven play.
Looking at a few more risk indicators, there's been no real respite either in French credit default swaps - instruments that reflect the cost to bondholders of insuring against default.
Five-year CDS on French sovereign debt FRGV5YUSAC=MG are still at 36 basis points, barely down from the four-year high of 38 bps at the close on June 17, according to S&P Global Market Intelligence.
The pressure hasn't eased up on French bank stocks either. Shares in BNP Paribas BNPP.PA, Societe Generale SOGN.PA and Credit Agricole CAGR.PA have shed 9-14% since Macron's announcement, while CDS on their five-year debt have also barely budged from those post-announcement highs.
(Amanda Cooper)
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VOLATILITY HOLDS CLUES AMID NVIDIA SELL-OFF CLICK HERE
TUESDAY'S OTHER LIVE MARKETS POSTS:
POSITIONING FOR POLITICAL UNCERTAINTY CLICK HERE
EUROPEAN SHARES DROP, AEROSPACE STOCKS HAMMERED CLICK HERE
EUROPEAN FUTURES SIGNAL SOFT START CLICK HERE
TECH ROUT DRIVES FLIGHT TO VALUECLICK HERE
The far right fared better in areas with lower incomes https://reut.rs/3VnL2p6
European shares mostly lower https://reut.rs/3L0bYXw
Vive la difference - or not https://reut.rs/3xAUQV1
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