France's 10-Year Borrowing Costs Surge Against European Benchmarks!
The gap between the 10-year French government bond yield and the 10-year EUR Swap rate, a key benchmark for borrowing costs in Europe, has significantly widened since the recent European elections in France The trend was already "en marche" since S&P recently downgraded France’s credit rating from AA to AA-, following a similar downgrade by Fitch last year. Moody’s has also indicated that the current situation might lead to another downgrade. While other countries like Ireland and Spain have seen their financial health improve, France seems to be facing more challenges. Political uncertainty and reliance on international investors might cause money to leave France, pushing borrowing costs even higher. Higher interest rates on French bonds mean that investors want bigger returns because they see more risk in lending money to France. Japanese investors, who own a lot of French bonds, might start investing more in their own country due to rising interest rates there, reducing demand for French bonds. Additionally, some hedge funds are betting against European government bonds, showing a lack of confidence in the stability of European economies, including France. This trend underscores the growing concerns about France’s economic and political stability in the broader European context. Source: Bloomberg
Reminder: investing at all-time highs is safer than investing during drawdowns $SPY
Source: Mike Zaccardi
The traffic light coalition in Germany suffers a historic rout in the European elections.
German Chancellor Scholz’s SPD crashed to 14%, their worst-ever result, falling to 3rd place behind the far-right AfD, exit polls show. The other 2 parties in Scholz’s ruling alliance – the Greens and the FDP – got 12% and 5% respectively. Source: Bloomberg, HolgerZ
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Source: Reza Zahiri
FRANCE | *MACRON'S GROUP THRASHED BY FAR-RIGHT LE PEN'S PARTY IN EU VOTE - BBG
*MACRON GROUP HAS 15%-16%, LE PEN'S HAS 32%-33%: POLLSTERS Source: Bloomberg, Le Figaro, C.Barraud
Brent oil bullish bets at 10 year low
Source: Bloomberg
A staggering percentage of US equity funds are underperforming the S&P 1500.
The longer the time period the higher the percentage of underperformers. Source: Charlie Bilello
IMF warns the U.S. needs to reduce its debt burden or else....
Source: FT, Barchart
