Continuously improve the French state debt-risk metrics



Continues, the French public debt risk indicators significant improvement, indicating the French president’s election outcome developing market optimistic. The president’s choice for Sunday’s final round of the EU’s pro-Emmanuel Macron, has won a significant dominance. Competition of the EU-sceptic Marine Le Pen. One of the leading london market information services company, IHS Markit Tuesday’s statement, according to the French state debt-repayment failure risk to the tied market insurance replacement transactions (credit default swaps, CDS) middle exchange rate of slightly to 31 basis points under decreased.

It’s only months 25,75 accurate reduction, and means that units, tens of millions of dollars corresponding to the nominal French government bond bankruptcy insurance now, not quite 31 thousand dollars, the market is governed by a five-year maturity, almost 26 thousand dollars less than the president’s choice in the month before.

In the developed industrial region sovereign debtors in the case of a month to significant fluctuations matter in the CDS transaction twenty points greater than exchange rate changes. This year’s first months, the presidential election approaching, even at an accelerated pace deteriorated, the French state debt-risk measure, because market participants did not rule out the possibility that the final round in two EU-sceptic candidate, Marine Le Pen with Jean-Luc Mélenchon to merge the head of state for an office. At the end of January and the end of February between, for example, the france sovereign CDS transactions, high rate 26 basis points to 66 basis points – the current rates are more than doubled – increased, and was higher than a lot of non-EU-member emerging economies dears.

The French CDS-pricing of a sway primarily in the leading industrial power within a group of it was blatant, and the rates for the last few days a marked improvement after even exceeds the best debt are considered economic.

The Markit statement, according to Germany’s sovereign CDS transactions fee is currently 17 basis points during the movement, the british, the american and the japanese CDS contract I medium rate 22 to 26 basis points between levels.

Other great london houses emphasize, that Macron is rather unfavourable economic starting position from the start of a five-year presidential mandate. Moody’s Investors Service international credit rating highlighted the situation of the French public debt ratio approaches the gross domestic product (GDP) of 100 percent, and according to the company, it is unlikely that the end of the decade before the merits of a reduction to start. France for decades not achieved serious success in the debt reduction in, and this is expected to continue to be so – they can predict the Moody’s london analysts.

The credit rating according to all of this is relatively weak growth potential also contributed, and the significant growth incentive reform failure it is not likely that the French economy annual-increase in the longer term, a dead give 1.5 percent.



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