French Oat-German Bund 10-year Spread

The 10-year France-German bond spread widened a couple basis points this past week, probably due to a general repricing in sovereign bonds in the euro zone on the back of Mario Draghi’s perceived hawkish statements at the ECB meeting on Thursday:

“Draghi has ever so slightly opened the door to changing their policy stance. He’s done this by saying that the Governing Council talked about changing the language about where rates are in their monthly statement, but didn’t actually change it. This is effectively him signalling that something might change in the future, just not today.

“It’s a classic Draghi technique of saying something that will move markets without actually doing anything. Due to this, and a wordy response to a question about raising rates before QE ends, markets will now start to recalibrate on the assumption that the ECB will remove accommodation towards the end of the year.”
Patrick O’Donnell, Aberdeen Asset Management

The 10-year German yield rose 13 bps on the week to .484%; France 1o-year up 15 bps to 1.114%; Italian 10-year up 27 bps to 2.367%; and the Spain 10-year up 21 bps to 1.889%.

The latest polling has Macron moving into a tie with Le Penn in first round latest polling and up 21 percent in the second round.

A new poll of French voter intentions on Saturday showed Emmanuel Macron solidifying his support and still likely to defeat candidate Marine Le Pen in the May presidential run-off.

The BVA poll, published 43 days before the 23 April opening round, showed the independent centrist Macron scoring 26%, up 2 percentage points from a week earlier and five points in the last 15 days. He is now level with the far-right Le Pen.

Both remain well ahead of conservative Francois Fillon, who is up 1 point to 20%, and appears to have stabilised after his support fell amid a scandal-tainted campaign.

…As in all other polls to date, the poll showed Le Pen losing the run-off, in this case with 39% of the vote versus 61% for Macron. – Reuters

Oat-Bund Spread

 

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This entry was posted in Eurozone Sovereign Spreads, France, Politics, Uncategorized and tagged . Bookmark the permalink.

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